Executive Summary

Q4 2024 diluted EPS was $1.19, up 8% q/q; net income rose to $65.2M and book value per share reached $29.63 (+12% y/y) .
Net interest margin expanded to 2.96% (+12 bps q/q), with net interest income up $8.0M (28% annualized) as deposit costs fell and fixed-rate loans continued to reprice .
Balance sheet growth was healthy: deposits +$397M (12% annualized) and loans +$268M (9% annualized); liquidity remained strong with $2.4B cash and no FHLB advances or brokered deposits .
Credit quality stayed solid (NPA/Assets 0.26%; annualized NCOs 0.09%); CET1 increased to 11.42% (from 10.91% y/y) .
Dividend increased 12% to $0.335 per share and management signaled ongoing margin tailwinds from ~$1.5B fixed-loan repricing plus ~$325M securities cash flows in 2025 .

What Went Well and What Went Wrong

What Went Well

Sustained margin momentum with NIM at 2.96% and net interest income at $123.2M; CFO highlighted earning asset yields and deposit rate reductions driving the 12 bps q/q NIM increase .
Deposit franchise strengthened: noninterest-bearing demand rose to 20% of average deposits (from 19% in Q3), service charges grew 21.5% y/y, and correspondent funding channel expanded to 378 banks (+24 in 2024) .
Credit remained benign: annualized net charge-offs at 9 bps for Q4 and FY, ALLL/Loans steady at 1.30%, and management sees issues more “weak companies” than “industries,” implying portfolio resilience .
Management tone constructive post-election: “We are optimistic… make stock sellers and short sellers remorseful” and expect loan demand and margins to improve .

What Went Wrong

Loan yields dipped to 6.43% in Q4 (from 6.62% Q3) amid mix effects; earning asset yields fell 25 bps, partially offset by a 46 bps drop in interest-bearing liability rates .
NPA/Assets ticked up to 0.26% (vs. 0.14% in Q4’23) driven by a single relationship; one nonperformer sale fell through and remains under contract, with resolution still pending .
Expenses reported at $46.9M included health plan shortfall funding, one-time EDP costs, and a fraud receivable write-down; core expense run-rate increased modestly to ~$45.3M vs. the earlier ~$44.8M target .
Excess liquidity (~$370M held) weighed on NIM percent; December margin would be “around 3%” absent excess funds, indicating some near-term drag from liquidity positioning .

Financial Results

Core P&L and Profitability (quarterly)

Metric	Q2 2024	Q3 2024	Q4 2024
Diluted EPS ($)	$0.95	$1.10	$1.19
Net Interest Income ($M)	$105.875	$115.121	$123.168
Non-Interest Income ($M)	$8.891	$8.549	$8.803
Total Revenue (NII + Non-Interest) ($M)	$114.766	$123.670	$131.971
Net Interest Margin (%)	2.79%	2.84%	2.96%
ROAA (%)	1.34%	1.43%	1.52%
Efficiency Ratio (%)	37.31%	36.90%	35.54%

Balance Sheet and Credit (quarterly)

Metric	Q2 2024	Q3 2024	Q4 2024
Loans (end) ($M)	$12,332.780	$12,338.226	$12,605.836
Deposits (end) ($M)	$13,259.392	$13,146.529	$13,543.459
NPA / Total Assets (%)	0.23%	0.25%	0.26%
Net Charge-offs / Avg Loans (annualized, %)	0.10%	0.09%	0.09%
ALLL / Loans (%)	1.28%	1.31%	1.30%
CET1 (%)	10.93%	11.25%	11.42%

Margin and Pricing Drivers

Metric	Q2 2024	Q3 2024	Q4 2024
Loan Yield (%)	6.48%	6.62%	6.43%
Investment Yield (%)	3.32%	3.57%	3.49%
Avg Interest-Bearing Deposit Rate (%)	4.08%	4.12%	3.63%
Fed Funds Purchased Rate (%)	5.50%	5.42%	4.80%
Interest-Bearing Checking (q/e rate, %)	2.84%	2.97%	3.32% (q/e) / Beta 66

Segment Loan Mix (end of period)

Loan Type ($M)	Q2 2024	Q3 2024	Q4 2024
Commercial, Financial & Agricultural	$2,935.577	$2,793.989	$2,869.894
Real Estate – Construction	$1,510.677	$1,439.648	$1,489.306
Real Estate – Mortgage (Subtotal)	$7,822.079	$8,042.603	$8,173.009
Consumer	$64.447	$61.986	$73.627
Total Loans	$12,332.780	$12,338.226	$12,605.836

Non-Interest Income Components

Component ($M)	Q2 2024	Q3 2024	Q4 2024
Deposit Service Charges	$2.293	$2.341	$2.650
Mortgage Banking	$1.379	$1.352	$1.513
Credit Card Income	$2.333	$1.925	$1.867
BOLI Income	$2.058	$2.113	$2.131
Other Operating Income	$0.828	$0.818	$0.642

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Tax Rate	Q4 2024 / Forward	~19–20% (Q3: ~19%; Q2: ~20%)	~19% (ex adjustments); 17.9% reported Q4 with positive tax credit adjustment	Maintained (core); reported benefited
Core OpEx Run-Rate (quarterly)	Forward	~$44.8M (Q2 articulated run-rate)	~$45.3M currently; reported $46.9M incl. one-time items	Raised modestly (core)
Margin/NIM	Forward	Expect NIM to increase throughout 2024	Expect continued improvement; December “around 3%” absent excess cash; slightly liability sensitive	Maintained constructive outlook
Fixed-Rate Asset Repricing	2025	~+$1.8B over next year (prior outline)	~$1.5B fixed loans (high 4s → high 6s) + ~$300M securities (3.2%) set to mature/pay down in 2025	Clarified cadence/levels
Dividend	Q1 2025	$0.30/share	$0.335/share (+12%)	Raised

Earnings Call Themes & Trends

Topic	Q2 2024 (Q-2)	Q3 2024 (Q-1)	Q4 2024 (Current)	Trend
Margin/NIM	NIM +13 bps q/q to 2.79%; asset yields +16 bps; liability costs modestly higher	NIM +5 bps to 2.84%; cash drag on %; strong NII dollar growth	NIM +12 bps to 2.96%; earning asset yields −25 bps; liability rates −46 bps	Improving with tailwinds
Deposit Pricing/Beta	Deposit growth 16% annualized; IB deposit rate 4.08% avg	IB deposit rate 4.12% avg; industry pricing rationalizing; CDs moderating	Interest-bearing checking fell 3.65%→3.32% (beta 66); NIBD rose to 20% avg	Costs decreasing
Loan Growth/Pipeline	Loans +15% annualized; added new bankers/markets	Q3 growth muted; payoffs of low fixed-rate loans; pipeline strong; post-election delays	Net growth +$268M; line utilization up (36.7%→38.4%); pipeline +$150M post-election	Reaccelerating
Credit Quality	NPA/Assets 0.23%; NCOs 10 bps; ALLL/Loans 1.28%	NPA/Assets 0.25%; special mention workforce housing relationship	NPA/Assets 0.26%; NCOs 9 bps; no industry-wide stress; one NPA sale pending	Stable/benign
Liquidity/Correspondent	Liquidity strong; no FHLB/brokered; adding correspondent banks	Avg cash ↑; one municipal outflow; strategy to pre-fund growth	$2.4B cash; correspondent customers 378 across 30 states	Robust
Technology/Systems	ASU 2023-02; tax credit accounting change; EDP exit costs discussed	One-time EDP costs; systems enhancements cited	One-time EDP costs for upcoming systems enhancements	Investing, one-time items
Regulatory/FDIC	Special assessment accounted for in Q1	FDIC assessments ~$2.355M; expense rationalization	FDIC assessments $2.225M; y/y decline vs. Q4’23 special items	Normalizing

Management Commentary

CEO: “We were really pleased with the quarter… diluted EPS up 10% over 2023… NIM climbed steadily from 2.57% in Q4 2023 to 2.96% in Q4 2024… book value grew 12% y/y” .
CEO on outlook: “Post-election… we are more optimistic… expect loan demand to continue to improve and margins to improve a little bit. Our goal is to make stock sellers and short sellers remorseful” .
CFO: “Earning asset yields decreased 25 bps, while interest-bearing liability rates decreased by 46 bps… NIM increased 12 bps q/q while holding an additional $370M in cash” .
CFO on repricing: “~$325M securities to mature/pay down in 2025 (current yield 3.2%); $6.3B fixed-rate loans repriced up 10 bps in Q4; $6.1B variable-rate loans yielding 7.3%” .
Credit: “Annualized net charge-offs for the fourth quarter: 9 bps… ALLL/Loans 1.30%… NPAs/Assets 26 bps” .

Q&A Highlights

Deposit betas/NIM trajectory: Excess cash allowed disciplined rate management; limited client pushback; loan floors should support margins as rates decline .
Hiring/Expansion: Added 4 producers in Q4; opportunistic hiring; potential to capitalize on M&A dislocation across Southeast; lists of target markets maintained .
Loan growth 2025: Management cautious due to rate environment and construction costs; expects Florida net-inmigration to support opportunities .
Repricing runway: ~$1.5B fixed loans repricing in the first year (high 4s → high 6s), plus ~$300M securities maturities; margin around 3% absent excess liquidity .
Nonperformer resolution: Sale under contract; no expected loss; timing uncertain .
Origination yields: Q4 originations/renewals ~7.10%; aiming for better mix between fixed and floating .
Credit normalization: CEO reiterated potential for charge-offs to normalize to ~25 bps over time; not indicative of industry stress .

Estimates Context

S&P Global Wall Street consensus for Q4 2024 could not be retrieved at time of request due to provider limit; therefore, beat/miss vs. consensus is unavailable. Values were intended to be pulled from S&P Global but were unavailable at time of analysis.
Implications: Given NIM expansion, lower deposit costs, and higher NII dollars, future consensus may need to reflect improved NII trajectory and modestly higher core OpEx run-rate; monitor revisions after full model updates .

Key Takeaways for Investors

Margin tailwind intact: Deposit costs are falling and fixed-rate assets are repricing upward; expect further NIM support in early 2025 despite mixed loan yields in Q4 .
Liquidity optionality: $2.4B cash with no brokered/FHLB balances provides funding flexibility; excess liquidity currently dampens NIM percentage but supports disciplined pricing .
Credit resilient but watch normalization: NPAs modestly higher on one relationship; management cautions eventual charge-off normalization (~25–35 bps possible in a year), important for provisioning assumptions .
Expense discipline with one-time items: Reported OpEx included health plan shortfall and EDP costs; core run-rate guided modestly higher to ~$45.3M/quarter—key for efficiency ratio trajectory .
Franchise growth: Noninterest-bearing deposits improved; correspondent banking network expanding; new markets (Memphis, Auburn) adding producers—supportive of fee income and funding mix .
Dividend signal: 12% dividend increase reinforces capital strength and earnings momentum; CET1 at 11.42% offers buffer for growth and normalization .
Near-term trading lens: Stock sensitive to margin commentary, deposit betas, and repricing cadence; watch management updates on excess liquidity deployment and loan growth post-election .

Notes: All figures and statements sourced from the company’s Q4 2024 press release, 8-K, and earnings call materials cited above. S&P Global consensus estimates were unavailable at the time of analysis.

ServisFirst Bancshares, Inc. (SFBS)·Q4 2024 Earnings Summary