ServisFirst earnings rose 33.2% in the third quarter of 2026, although diluted earnings per share of $0.80 fell short of the $0.82 analyst estimate. The bank holding company reported net income of $87.3 million on October 19 for the quarter ended September 30, as loan growth and a wider year-over-year interest margin supported profitability.
Key Takeaways
- Diluted EPS increased from $0.60 a year earlier but missed the analyst estimate by $0.02.
- Net interest income reached $159.8 million, with the interest margin unchanged from the second quarter.
- Loans grew 10.7% year over year, while quarter-end deposits declined slightly.
Table of Contents
- ServisFirst earnings benefit from stronger interest income
- Loan growth contrasts with quarter-end deposit decline
- Efficiency improves as loan-loss provisions increase
- First buyback authorized after quarter-end
- Conclusion
ServisFirst earnings benefit from stronger interest income
The company’s third-quarter 2026 earnings announcement showed net interest income increasing to $159.8 million from $133.4 million a year earlier. That figure measures interest earned after interest expense, rather than total revenue; the bank separately reported $13.1 million of noninterest income.
Net interest margin was 3.63%, up from 3.09% a year earlier and unchanged from the second quarter. Average interest-bearing deposit rates fell to 2.80% from 3.41% a year earlier, helping explain the improvement despite lower loan yields.
Reported EPS grew 33.3% year over year. On the company’s adjusted, non-GAAP basis, EPS increased 23.1% from $0.65 to $0.80. All share and per-share comparisons reflect the two-for-one stock split completed during the quarter.
| Item | Details |
|---|---|
| Nonperforming assets to total assets | 0.96%, unchanged from both Q2 2026 and Q3 2025. |
| Annualized net charge-offs to average loans | 0.21%, versus 0.11% in Q2 2026 and 0.27% in Q3 2025. |
| Allowance for credit losses to total loans | 1.28%, versus 1.26% in Q2 2026. |
| Common equity tier 1 capital ratio | 11.98%, up from 11.49% a year earlier. |
Loan growth contrasts with quarter-end deposit decline
Loans ended September at $14.74 billion, up $1.43 billion from a year earlier and $258.8 million from June. Chairman, President and CEO Tom Broughton said loan activity was improving, with continued growth in the loan pipeline.
Quarter-end deposits totaled $14.09 billion, down 0.1% year over year and 3.2% from June. Average deposits tell a less negative story: they increased 1.4% from a year earlier to $14.33 billion and were slightly higher than in the second quarter.
The distinction matters because an ending balance captures one date, while an average reflects funding throughout the quarter. Noninterest-bearing deposits also increased 12% year over year, despite the small decline in total ending deposits.
Efficiency improves as loan-loss provisions increase
The efficiency ratio improved to 30.20% from 35.22% a year earlier, although it increased from 29.65% in the second quarter. Noninterest expenses rose 8.8% year over year to $52.2 million, so the annual improvement did not represent an outright reduction in costs.
The provision for loan losses increased to $14.9 million from $9.3 million a year earlier. Credit indicators were mixed: the nonperforming-asset ratio remained stable, while annualized net charge-offs rose from the preceding quarter but declined year over year.
First buyback authorized after quarter-end
After September 30, ServisFirst announced its inaugural stock repurchase program, authorizing purchases of up to two million common shares through December 31, 2027. The authorization permits repurchases; it does not establish that any shares have already been bought.
Conclusion
ServisFirst delivered strong annual profit growth despite the modest EPS miss. The newly authorized buyback, which runs through December 31, 2027, is the next confirmed capital-management initiative to watch; authorization remains distinct from completed purchases.
Read More News
Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
