ServisFirst Bancshares reports 33% rise in third-quarter earnings per share

ServisFirst Bancshares, Inc. (NYSE: SFBS) reported diluted earnings per share of $0.80 for the third quarter of 2026, a 33% increase from the same period in 2025. The Birmingham, Alabama-based bank also announced the completion of a two-for-one stock split during the quarter, with all share and per-share amounts reflecting retrospective adjustments to prior-period data.

Net income for the quarter ended September 30, 2026, totaled $87.3 million, up from $65.6 million in the third quarter of 2025. The bank's annualized return on average common stockholders' equity stood at 17.26%, compared to 14.88% in the prior-year period. Year-to-date return on average common stockholders' equity rose from 15.01% in 2025 to 17.62% in 2026. Management attributed the performance to solid economic trends and improving loan activity.

Loan growth remained a central component of the quarter's results. Ending total loans reached $14.74 billion, an increase of $1.43 billion, or 10.7%, from $13.31 billion in the third quarter of 2025. Average loans for the quarter were $14.54 billion, up 10.1% year-over-year. Loan yields were 6.24% in the third quarter of 2026, slightly down from 6.34% in the third quarter of 2025 but up from 6.23% in the second quarter of 2026. The bank noted that a $1.9 million interest income recovery from a large credit relationship in the second quarter of 2026 had previously boosted loan yields by five basis points.

Net interest income increased to $159.8 million for the third quarter of 2026, compared to $133.4 million in the prior-year period and $155.6 million in the preceding quarter. The net interest margin held steady at 3.63%, unchanged from the second quarter of 2026 and up from 3.09% in the third quarter of 2025. Excluding a loan recovery in the previous quarter, the net interest margin was five basis points higher than the second-quarter figure and up 54 basis points year-over-year.

On the funding side, noninterest-bearing demand deposits increased by 12% year-over-year, although they decreased by 2.8% from the second quarter of 2026. Total deposits ended the quarter at $14.09 billion, a decrease of $461.4 million from the second-quarter balance. Average interest-bearing deposit rates remained flat at 2.80% compared to the second quarter of 2026, but were significantly lower than the 3.41% recorded in the third quarter of 2025.

The bank's efficiency ratio improved to 30.20% from 35.22% in the third quarter of 2025. Book value per share rose to $18.63, a 14% year-over-year increase. Consolidated common equity tier 1 capital to risk-weighted assets increased from 11.49% in the prior-year period to 11.98% in the third quarter of 2026.

Following the end of the quarter, ServisFirst Bancshares approved its first share buyback plan, allowing for the purchase of as many as two million common shares by December 31, 2027.

Tom Broughton, Chairman, President, and CEO, stated that loan activity is improving with continued growth in the loan pipeline. David Sparacio, CFO, noted that the company is growing top-line revenue through asset and margin growth while maintaining an efficiency ratio that supports top-quartile returns.