##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
 (Mark one)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 Commission file number 000-53149
 SERVISFIRST BANCSHARES, INC.
  Delaware
    
    26-0734029(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)
 (205) 949-0302  (Registrants Telephone Number, Including Area Code)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Class
    
    Outstanding as of April 30, 2009Common stock, $.001 par value
    
    5,513,482




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##### 



TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosure about Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    32PART II. OTHER INFORMATIONItem 1 Legal Proceedings
    
    
    33Item 1A. Risk Factors
    
    
    33Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3. Defaults Upon Senior Securities
    
    
    33Item 4. Submission of Matters to a Vote of Security Holders
    
    
    33Item 5. Other Information
    
    
    33Item 6. Exhibits
    
    
    33EX-31.01EX-31.02EX-32.01EX-32.02
  2




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##### Table of Contents



PART 1. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 SERVISFIRST BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2009 AND DECEMBER 31, 2008
(In thousands)
 December 31,March 31, 2009
    
    
    2008(Unaudited)
    
    
    (Audited)ASSETSCash and due from banks
    
    $
    17,925
    
    
    $
    22,844Interest-bearing balances due from depository institutions
    
    
    1,019
    
    
    
    30,774Federal funds sold
    
    
    88,751
    
    
    
    19,300Cash and cash equivalents
    
    $
    107,695
    
    
    
    72,918Securities available for sale
    
    
    105,260
    
    
    
    102,339Restricted equity securities
    
    
    3,241
    
    
    
    2,659Mortgage loans held for sale
    
    
    5,785
    
    
    
    3,320Loans
    
    
    1,023,893
    
    
    
    968,233Less allowance for loan losses
    
    
    (12,412
    )
    
    
    (10,602
    )Loans, net
    
    
    1,011,481
    
    
    
    957,631Premises and equipment, net
    
    
    3,778
    
    
    
    3,884Accrued interest and dividends receivable
    
    
    3,934
    
    
    
    4,026Deferred tax assets
    
    
    4,528
    
    
    
    3,585Other real estate owned
    
    
    8,088
    
    
    
    10,473Other assets
    
    
    1,772
    
    
    
    1,437Total assets
    
    $
    1,255,562
    
    
    $
    1,162,272LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits:Noninterest-bearing
    
    $
    122,643
    
    
    $
    121,459Interest-bearing
    
    
    1,004,504
    
    
    
    915,860Total deposits
    
    
    1,127,147
    
    
    
    1,037,319Other borrowings
    
    
    20,000
    
    
    
    20,000Trust preferred securities
    
    
    15,123
    
    
    
    15,087Accrued interest payable
    
    
    1,150
    
    
    
    1,280Other liabilities
    
    
    916
    
    
    
    1,803Total liabilities
    
    
    1,164,336
    
    
    
    1,075,489Shareholders equity:Common stock, par value $.001 per share; 15,000,000 shares authorized;
5,513,482 and 5,374,022 shares issued and outstanding
    
    
    6
    
    
    
    5Preferred stock, par value $.001 per share; 1,000,000 shares authorized;
no shares outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    74,402
    
    
    
    70,729Retained earnings
    
    
    15,808
    
    
    
    15,087Accumulated other comprehensive income
    
    
    1,010
    
    
    
    962Total stockholders equity
    
    
    91,226
    
    
    
    86,783Total liabilities and stockholders equity
    
    $
    1,255,562
    
    
    $
    1,162,272
 See Notes to Consolidated Financial Statements.
 3




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SERVISFIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2009 AND 2008
(Unaudited)
(In thousands, except per share amounts)
 2009
    
    
    2008Interest income:Interest and fees on loans
    
    $
    12,509
    
    
    $
    12,374Taxable securities
    
    
    1,108
    
    
    
    906Nontaxable securities
    
    
    278
    
    
    
    215Federal funds sold
    
    
    24
    
    
    
    273Other interest and dividends
    
    
    18
    
    
    
    67Total interest income
    
    
    13,937
    
    
    
    13,835Interest expense:Deposits
    
    
    4,393
    
    
    
    5,722Borrowed funds
    
    
    498
    
    
    
    26Total interest expense
    
    
    4,891
    
    
    
    5,748Net interest income
    
    
    9,046
    
    
    
    8,087Provision for loan losses
    
    
    2,460
    
    
    
    1,383Net interest income after provision for loan losses
    
    
    6,586
    
    
    
    6,704Noninterest income:Service charges on deposit accounts
    
    
    356
    
    
    
    256Other operating income
    
    
    563
    
    
    
    288Total noninterest income
    
    
    919
    
    
    
    544Noninterest expenses:Salaries and employee benefits
    
    
    3,367
    
    
    
    2,826Equipment and occupancy expense
    
    
    588
    
    
    
    530Professional services
    
    
    214
    
    
    
    316Other operating expenses
    
    
    2,263
    
    
    
    1,158Total noninterest expenses
    
    
    6,432
    
    
    
    4,830Income before income taxes
    
    
    1,073
    
    
    
    2,418Provision for income taxes
    
    
    352
    
    
    
    848Net income
    
    $
    721
    
    
    $
    1,570Basic earnings per share
    
    $
    0.13
    
    
    $
    0.31Diluted earnings per share
    
    $
    0.13
    
    
    $
    0.30
 See Notes to Consolidated Financial Statements.
 4




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SERVISFIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
THREE MONTHS ENDED MARCH 31, 2009 AND 2008
(Unaudited)
(In thousands)
 2009
    
    
    2008Net income
    
    $
    721
    
    
    $
    1,570Other comprehensive income, net of tax:Unrealized holding gains arising during period from securities
available for sale, net of tax of $71 and $352 for 2009 and
2008, respectively
    
    
    138
    
    
    
    687Unrealized holding gains arising during period from derivative,
net of tax of $35 for 2008
    
    
    
    
    
    
    68Reclassification adjustment for net gains realized on derivatives
in net income, net of tax benefit of $46 for 2009 and 2008
    
    
    (90
    )
    
    
    (90
    )Other comprehensive income
    
    
    48
    
    
    
    665Comprehensive income
    
    $
    769
    
    
    $
    2,235
 See Notes to Consolidated Financial Statements
 5




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SERVISFIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
THREE MONTHS ENDED MARCH 31, 2009
(Unaudited)
(In thousands)
 Additional
    
    
    
    
    
    
    Other
    
    
    TotalCommon
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersStock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    EquityBalance, December 31, 2008
    
    $
    5
    
    
    $
    70,729
    
    
    $
    15,087
    
    
    $
    962
    
    
    $
    86,783Sale of 139,460 shares
    
    
    1
    
    
    
    3,478
    
    
    
    
    
    
    
    
    
    
    
    3,479Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48
    
    
    
    48Stock based compensation expense
    
    
    
    
    
    
    195
    
    
    
    
    
    
    
    
    
    
    
    195Net income
    
    
    
    
    
    
    
    
    
    
    721
    
    
    
    
    
    
    
    721Balance, March 31, 2009
    
    $
    6
    
    
    $
    74,402
    
    
    $
    15,808
    
    
    $
    1,010
    
    
    $
    91,226
 See Notes to Consolidated Financial Statements
 6




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SERVISFIRST BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2009 AND 2008
(Unaudited)
(In thousands)
 2009
    
    
    2008OPERATING ACTIVITIESNet income
    
    $
    721
    
    
    $
    1,570Adjustments to reconcile net income to net cash used in
operating activities:Deferred tax benefit
    
    
    (967
    )
    
    
    (174
    )Provision for loan losses
    
    
    2,460
    
    
    
    1,383Depreciation and amortization
    
    
    273
    
    
    
    225Net accretion of investments
    
    
    (156
    )
    
    
    (77
    )Amortized gain on derivative
    
    
    (136
    )
    
    
    (136
    )Decrease in accrued interest and dividends receivable
    
    
    92
    
    
    
    13Stock compensation expense
    
    
    195
    
    
    
    161(Decrease) increase in accrued interest payable
    
    
    (130
    )
    
    
    118Proceeds from mortgage loans held for sale
    
    
    51,562
    
    
    
    16,873Originations of mortgage loans held for sale
    
    
    (54,320
    )
    
    
    (19,178
    )Loss on sale of other real estate
    
    
    612
    
    
    
    184Net change in other assets, liabilities, and other operating activities
    
    
    (1,178
    )
    
    
    (1,161
    )Net cash used in operating activities
    
    
    (973
    )
    
    
    (199
    )INVESTMENT ACTIVITIESPurchase of securities available for sale
    
    
    (6,972
    )
    
    
    (2,825
    )Proceeds from maturities, calls and paydowns of securities available
for sale
    
    
    4,417
    
    
    
    2,201Increase in loans
    
    
    (57,179
    )
    
    
    (82,620
    )Purchase of premises and equipment
    
    
    (167
    )
    
    
    (119
    )Purchase of restricted equity securities
    
    
    (582
    )
    
    
    (1,456
    )Proceeds from sale of interest rate floor
    
    
    
    
    
    
    1,000Proceeds from sale of other real estate owned and repossessions
    
    
    2,926
    
    
    
    Net cash used in investing activities
    
    
    (57,557
    )
    
    
    (83,819
    )FINANCING ACTIVITIESNet increase in noninterest-bearing deposits
    
    
    88,644
    
    
    
    3,595Net increase in interest-bearing deposits
    
    
    1,184
    
    
    
    96,493Proceeds from other borrowings
    
    
    
    
    
    
    20,202Proceeds from sale of stock, net
    
    
    3,479
    
    
    
    Net cash provided by financing activities
    
    
    93,307
    
    
    
    120,290Net increase in cash and cash equivalents
    
    
    34,777
    
    
    
    36,272Cash and cash equivalents at beginning of year
    
    
    72,918
    
    
    
    66,422Cash and cash equivalents at end of year
    
    $
    107,695
    
    
    $
    102,694SUPPLEMENTAL DISCLOSURECash paid for:Interest
    
    $
    5,021
    
    
    $
    5,630Income taxes
    
    
    1,365
    
    
    
    1,250NONCASH TRANSACTIONSTransfers of loans from held for sale to held for investment
    
    $
    293
    
    
    $
    Other real estate acquired in settlement of loans
    
    
    1,436
    
    
    
    2,085
 See Notes to Consolidated Financial Statements.
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SERVISFIRST BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
(Unaudited)
 NOTE 1  GENERAL
   NOTE 2  CASH AND CASH FLOWS
  NOTE 3  EARNINGS PER COMMON SHARE
  Three Months Ended March 31,2009
    
    
    2008(In Thousands, Except Shares and PerShare Data)Earnings per shareWeighted average common shares outstanding
    
    
    5,401,914
    
    
    
    5,113,482Net income
    
    $
    721
    
    
    $
    1,570Basic earnings per share
    
    $
    0.13
    
    
    $
    0.31Weighted average common shares outstanding
    
    
    5,401,914
    
    
    
    5,113,482Dilutive effects of assumed conversions and
exercise of stock options and warrants
    
    
    287,495
    
    
    
    170,435Weighted average common and dilutive potential
common shares outstanding
    
    
    5,689,409
    
    
    
    5,283,917Net income
    
    $
    721
    
    
    $
    1,570Diluted earnings per share
    
    $
    0.13
    
    
    $
    0.30
 8




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 NOTE 4  EMPLOYEE AND DIRECTOR BENEFITS
 Stock Options
       March 31,2009
    
    2008Expected volatility
    
    
    20.00
    %
    
    
    20.00
    %Expected dividends
    
    
    0.50
    %
    
    
    0.50
    %Expected term (in years)
    
    
    7
    
    
    
    7Risk-free rate
    
    
    1.65
    %
    
    
    2.93
    %
 9




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
  WeightedAverageWeighted
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateExercise
    
    
    Term
    
    
    IntrinsicShares
    
    
    Price
    
    
    (years)
    
    
    Value(In Thousands)Three Months Ended March 31, 2009:Outstanding at January 1, 2009
    
    
    796,000
    
    
    $
    14.50
    
    
    
    7.7
    
    
    $
    8,363Granted
    
    
    37,500
    
    
    
    25.00
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2009
    
    
    833,500
    
    
    
    14.97
    
    
    
    7.8
    
    
    $
    8,363Exercisable at March 31, 2009
    
    
    75,264
    
    
    $
    12.34
    
    
    
    6.9
    
    
    $
    953Three Months Ended March 31, 2008:Outstanding at January 1, 2008
    
    
    712,500
    
    
    $
    13.12
    
    
    
    8.4
    
    
    $
    4,905Granted
    
    
    13,500
    
    
    
    20.00
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2008
    
    
    726,000
    
    
    
    13.24
    
    
    
    8.2
    
    
    $
    4,905Exercisable at March 31, 2008
    
    
    20,000
    
    
    $
    10.00
    
    
    
    7.1
    
    
    $
    200
  Stock Warrants
   NOTE 5  DERIVATIVES
  10




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
   NOTE 6  ADOPTION OF NEW ACCOUNTING INTERPRETATIONS
 Disclosures about Derivative Instruments and Hedging Activities-an
amendment of FASB No. 133
  NOTE 7  RECENT ACCOUNTING PRONOUNCEMENTS
 Interim Disclosures about Fair Value of Financial Instruments Disclosures about Fair Values
of Financial Instruments
 11




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 Interim Financial Reporting
 Determining Whether a Market
Is Not Active and a Transaction Is Not Distressed
 Recognition and Presentation of Other-Than-Temporary Impairments.
 NOTE 8  FAIR VALUE MEASUREMENT
 Fair Value
Measurement,
 Level 1:
    
    Quoted prices (unadjusted) in active markets that are accessible
at the measurement date for assets or liabilities. The fair value
hierarchy gives the highest priority to Level 1 inputs.
 Level 2:
    
    Observable prices that are based on inputs not quoted on active
markets, but corroborated by market data.
 Level 3:
    
    Unobservable inputs are used when little or no market data is
available. The fair value hierarchy gives the lowest priority to
Level 3 inputs.
  Securities
 12




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
  Interest Rate Swap Agreements
 Impaired Loans- Accounting by Creditors for
Impairment of Loans, Accounting by Creditors for Impairment of a Loan
 Income Recognition and Disclosure,
 Other real estate owned
  13




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 (In Thousands)Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable Inputs
    
    
    UnobservableAssets (Level 1)
    
    
    (Level 2)
    
    
    Inputs (Level 3)
    
    
    TotalAssets Measured on a Recurring Basis:Available for sale securities
    
    $
    
    
    
    $
    105,260
    
    
    $
    
    
    
    $
    105,260Interest rate swap agreements
    
    
    
    
    
    
    850
    
    
    
    
    
    
    
    850Total assets at fair value
    
    $
    
    
    
    $
    106,110
    
    
    $
    
    
    
    $
    106,110Liabilities Measured on a Recurring Basis:Interest rate swap agreements
    
    $
    
    
    
    $
    850
    
    
    $
    
    
    
    $
    850Assets Measured on a Nonrecurring Basis:Impaired loans
    
    $
    
    
    
    $
    
    
    
    $
    19,359
    
    
    $
    19,359Other real estate owned
    
    
    
    
    
    
    
    
    
    
    8,088
    
    
    
    8,088Total assets at fair value
    
    $
    
    
    
    $
    
    
    
    $
    27,447
    
    
    $
    27,447
 
 (1)
    
    The Company chose not to elect the fair value option as prescribed by SFAS No. 159 for its
financial assets and financial liabilities that had not been previously carried at fair value. NOTE 9  SUBORDINATED DEFERRABLE INTEREST DEBENTURES
    14




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
     
 15




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Forward-Looking Statements
  Business
  16




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Overview
   Critical Accounting Policies
  17




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Financial Condition
 Investment Securities
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gain
    
    
    Loss
    
    
    Value(In Thousands)Securities Available for SaleMarch 31, 2009:U.S. Treasury and government agencies
    
    $
    5,007
    
    
    $
    191
    
    
    $
    
    
    
    $
    5,198Mortgage-backed securities
    
    
    58,038
    
    
    
    2,762
    
    
    
    
    
    
    
    60,800State and municipal securities
    
    
    35,781
    
    
    
    341
    
    
    
    (1,230
    )
    
    
    34,892Corporate debt
    
    
    5,039
    
    
    
    
    
    
    
    (669
    )
    
    
    4,370Total
    
    $
    103,865
    
    
    $
    3,294
    
    
    $
    (1,899
    )
    
    $
    105,260Securities Available for SaleDecember 31, 2008:U.S. Treasury and government agencies
    
    $
    5,093
    
    
    $
    42
    
    
    $
    (18
    )
    
    $
    5,117Mortgage-backed securities
    
    
    60,211
    
    
    
    2,338
    
    
    
    (5
    )
    
    
    62,544State and municipal securities
    
    
    29,879
    
    
    
    457
    
    
    
    (857
    )
    
    
    29,479Corporate debt
    
    
    5,971
    
    
    
    
    
    
    
    (772
    )
    
    
    5,199Total
    
    $
    101,154
    
    
    $
    2,837
    
    
    $
    (1,652
    )
    
    $
    102,339
   18




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Less Than
    
    
    One Year to
    
    
    Five Years to
    
    
    More ThanOne Year
    
    
    Five Years
    
    
    Ten Years
    
    
    Ten Years
    
    
    Total(In Thousands)U.S. Treasury and government agencies
    
    $
    
    
    
    $
    1,033
    
    
    $
    3,096
    
    
    $
    878
    
    
    $
    5,007Mortgage-backed securities
    
    
    
    
    
    
    36,945
    
    
    
    17,631
    
    
    
    3,462
    
    
    
    58,038State and municipal securities
    
    
    
    
    
    
    2,877
    
    
    
    19,211
    
    
    
    13,693
    
    
    
    35,781Corporate debt
    
    
    
    
    
    
    
    
    
    
    4,032
    
    
    
    1,007
    
    
    
    5,039$
    
    
    
    $
    40,855
    
    
    $
    43,970
    
    
    $
    19,040
    
    
    $
    103,865Tax-equivalent Yield
    
    
    0.00
    %
    
    
    5.24
    %
    
    
    5.55
    %
    
    
    5.86
    %
    
    
    5.48
    %
     Loans
  19




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##### Table of Contents



March 31,
    
    
    December 31,2009
    
    
    2008(In Thousands)Commercial, financial and agricultural
    
    $
    350,180
    
    
    $
    325,968Real estate  construction (1)
    
    
    246,868
    
    
    
    235,162Real estate  mortgage:Owner occupied
    
    
    173,867
    
    
    
    147,1971-4 Family
    
    
    134,041
    
    
    
    137,019Other
    
    
    88,408
    
    
    
    93,412Total Real Estate Mortgage
    
    
    396,316
    
    
    
    377,628Consumer
    
    
    30,529
    
    
    
    29,475Total Loans
    
    
    1,023,893
    
    
    
    968,233Allowance for loan losses
    
    
    (12,412
    )
    
    
    (10,602
    )Total Loans, Net
    
    $
    1,011,481
    
    
    $
    957,631
 
 (1)
    
    includes Owner Occupied real estate construction loans in the amount of $13,693 and $7,247 at March 31, 2009 and December 31, 2008, respectively Asset Quality
   20




---



##### Table of Contents



Three Months Ended March 31,2009
    
    
    2008(In Thousands)Allowance for Loan LossesBalance, beginning of period
    
    $
    10,602
    
    
    $
    7,732Charge-offs:Commercial, financial and agricultural
    
    
    
    
    
    
    (1
    )Real estate  construction
    
    
    (634
    )
    
    
    (279
    )Real estate  mortgage:Owner Occupied
    
    
    (40
    )
    
    
    1-4 family mortgage
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Total real estate mortgage
    
    
    (40
    )
    
    
    Consumer
    
    
    (15
    )
    
    
    (2
    )Total charge-offs
    
    
    (689
    )
    
    
    (282
    )Recoveries:Commercial, financial and agricultural
    
    
    
    
    
    
    19Real estate  construction
    
    
    39
    
    
    
    Real estate  mortgage:Owner Occupied
    
    
    
    
    
    
    1-4 family mortgage
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Total real estate mortgage
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    Total recoveries
    
    
    39
    
    
    
    19Net charge-offs
    
    
    (650
    )
    
    
    (263
    )Provision for loan losses charged to expense
    
    
    2,460
    
    
    
    1,383Balance, end of period
    
    $
    12,412
    
    
    $
    8,852As a percent of year to date average loans:Annualized net charge-offs
    
    
    0.27
    %
    
    
    0.15
    %Annualized provision for loan losses
    
    
    1.01
    %
    
    
    0.77
    %
  March 31, 2009
    
    
    December 31, 2008
    
    
    March 31, 2008Percentage of
    
    
    
    
    
    
    Percentage of
    
    
    
    
    
    
    Percentage ofLoans in Each
    
    
    
    
    
    
    Loans in Each
    
    
    
    
    
    
    Loans in EachCategory of
    
    
    
    
    
    
    Category of
    
    
    
    
    
    
    Category ofAmount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans(In Thousands)
    
    
    
    
    
    
    (In Thousands)
    
    
    
    
    
    
    (In Thousands)Commercial, financial and
agricultural
    
    $
    2,660
    
    
    
    34.20
    %
    
    $
    1,502
    
    
    
    33.67
    %
    
    $
    1,633
    
    
    
    31.50
    %Real estate  construction
    
    
    5,718
    
    
    
    24.11
    %
    
    
    5,473
    
    
    
    24.29
    %
    
    
    4,133
    
    
    
    29.24
    %Real estate  mortgage
    
    
    492
    
    
    
    38.71
    %
    
    
    428
    
    
    
    39.00
    %
    
    
    408
    
    
    
    35.67
    %Consumer
    
    
    95
    
    
    
    2.98
    %
    
    
    5
    
    
    
    3.04
    %
    
    
    10
    
    
    
    3.59
    %Other
    
    
    3,447
    
    
    
    
    
    
    
    3,194
    
    
    
    
    
    
    
    2,668
    
    
    
    Total
    
    $
    12,412
    
    
    
    100.00
    %
    
    $
    10,602
    
    
    
    100.00
    %
    
    $
    8,852
    
    
    
    100.00
    %
 21




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##### Table of Contents



Non-performing Assets
     March 31,
    
    
    December 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2008(In Thousands)Non-accrual loans
    
    $
    11,614
    
    
    $
    7,713
    
    
    $
    2,683Past due 90 days and still accruing (1)
    
    
    3,036
    
    
    
    1,939
    
    
    
    Troubled debt restructures
    
    
    518
    
    
    
    
    
    
    
    All other real estate owned
    
    
    8,088
    
    
    
    10,473
    
    
    
    3,443Total non-performing assets
    
    $
    23,256
    
    
    $
    20,125
    
    
    $
    6,126
 
 (1)
    
    $1,804 of this amount represents a loan that is guaranteed by the United States Department of Agriculture.  22




---



##### Table of Contents



Deposits
   Other Borrowings
  Liquidity
   23




---



##### Table of Contents



Payments due by PeriodOver 1 - 3
    
    
    Over 3  5Total
    
    
    1 year or less
    
    
    years
    
    
    years
    
    
    Over 5 years(In Thousands)Contractual obligations (1)Deposits without a stated maturity
    
    $
    928,077
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Certificates of deposit (2)
    
    
    199,069
    
    
    
    155,675
    
    
    
    30,026
    
    
    
    13,368
    
    
    
    FHLB borrowings
    
    
    20,000
    
    
    
    
    
    
    
    10,000
    
    
    
    10,000
    
    
    
    Subordinated debentures
    
    
    15,123
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,123Operating lease commitments
    
    
    16,331
    
    
    
    1,527
    
    
    
    2,994
    
    
    
    3,090
    
    
    
    8,720Total
    
    $
    1,178,600
    
    
    $
    157,202
    
    
    $
    43,020
    
    
    $
    26,458
    
    
    $
    23,843
 
 (1)
    
    Excludes interest(2)
    
    Certificates of deposit give customers the right to early withdrawal. Early withdrawals may be subject to penalties. The penalty amount dpends on the remaining time to maturity at the time of early withdrawal.
 Capital Adequacy
    24




---



##### Table of Contents



To Be Well CapitalizedFor Capital Adequacy
    
    Under Prompt CorrectiveActual
    
    Purposes
    
    Action ProvisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioAs of March 31, 2009:Total Capital to Risk Weighted Assets:Consolidated
    
    $
    117,628
    
    
    
    11.21
    %
    
    $
    83,945
    
    
    
    8.00
    %
    
    $
    104,931
    
    
    
    10.00
    %ServisFirst Bank
    
    
    116,386
    
    
    
    11.10
    %
    
    
    83,890
    
    
    
    8.00
    %
    
    
    104,862
    
    
    
    10.00
    %Tier I Capital to Risk Weighted Assets:Consolidated
    
    
    105,216
    
    
    
    10.03
    %
    
    
    41,972
    
    
    
    4.00
    %
    
    
    62,958
    
    
    
    6.00
    %ServisFirst Bank
    
    
    103,974
    
    
    
    9.92
    %
    
    
    41,945
    
    
    
    4.00
    %
    
    
    62,917
    
    
    
    6.00
    %Tier I Capital to Average Assets:Consolidated
    
    
    105,216
    
    
    
    8.84
    %
    
    
    47,619
    
    
    
    4.00
    %
    
    
    59,524
    
    
    
    5.00
    %ServisFirst Bank
    
    
    103,974
    
    
    
    8.74
    %
    
    
    47,589
    
    
    
    4.00
    %
    
    
    59,486
    
    
    
    5.00
    %As of December 31, 2008:Total Capital to Risk Weighted Assets:Consolidated
    
    $
    111,424
    
    
    
    11.25
    %
    
    $
    79,247
    
    
    
    8.00
    %
    
    $
    99,058
    
    
    
    10.00
    %ServisFirst Bank
    
    
    110,242
    
    
    
    11.14
    %
    
    
    79,182
    
    
    
    8.00
    %
    
    
    98,977
    
    
    
    10.00
    %Tier I Capital to Risk Weighted Assets:Consolidated
    
    
    100,822
    
    
    
    10.18
    %
    
    
    39,623
    
    
    
    4.00
    %
    
    
    59,435
    
    
    
    6.00
    %ServisFirst Bank
    
    
    99,640
    
    
    
    10.07
    %
    
    
    39,591
    
    
    
    4.00
    %
    
    
    59,386
    
    
    
    6.00
    %Tier I Capital to Average Assets:Consolidated
    
    
    100,822
    
    
    
    9.01
    %
    
    
    44,746
    
    
    
    4.00
    %
    
    
    55,933
    
    
    
    5.00
    %ServisFirst Bank
    
    
    99,640
    
    
    
    8.91
    %
    
    
    44,746
    
    
    
    4.00
    %
    
    
    55,933
    
    
    
    5.00
    %As of March 31, 2008:Total Capital to Risk Weighted Assets:Consolidated
    
    $
    81,832
    
    
    
    10.26
    %
    
    $
    63,779
    
    
    
    8.00
    %
    
    $
    79,724
    
    
    
    10.00
    %ServisFirst Bank
    
    
    81,967
    
    
    
    10.28
    %
    
    
    63,771
    
    
    
    8.00
    %
    
    
    79,714
    
    
    
    10.00
    %Tier I Capital to Risk Weighted Assets:Consolidated
    
    
    72,980
    
    
    
    9.15
    %
    
    
    31,890
    
    
    
    4.00
    %
    
    
    47,834
    
    
    
    6.00
    %ServisFirst Bank
    
    
    73,115
    
    
    
    9.17
    %
    
    
    31,886
    
    
    
    4.00
    %
    
    
    47,828
    
    
    
    6.00
    %Tier I Capital to Average Assets:Consolidated
    
    
    72,980
    
    
    
    8.37
    %
    
    
    34,898
    
    
    
    4.00
    %
    
    
    43,622
    
    
    
    5.00
    %ServisFirst Bank
    
    
    73,115
    
    
    
    8.38
    %
    
    
    34,898
    
    
    
    4.00
    %
    
    
    43,622
    
    
    
    5.00
    %
 Off-Balance Sheet Arrangements
    25




---



##### Table of Contents



(In Thousands)Commitments to extend credit
    
    $
    330,768Credit card arrangements
    
    
    12,978Standby letters of credit
    
    
    33,370$
    377,116
   Net Income
  Net Interest Income
  26




---



##### Table of Contents



27




---



##### Table of Contents



Average Balance Sheets and Net Interest Analysis
On a Fully Tax-Equivalent Basis
For the Three Months Ended March 31,
 2009
    
    
    2008Interest
    
    
    
    
    
    
    
    
    
    
    InterestAverage
    
    
    Earned /
    
    
    Average
    
    
    Average
    
    
    Earned
    
    
    AverageBalance
    
    
    Paid
    
    
    Yield / Rate
    
    
    Balance
    
    
    Paid
    
    
    Yield / RateAssets:Interest-earning assets:Loans, net of unearned income (1)
    
    $
    992,470
    
    
    $
    12,432
    
    
    
    5.08
    %
    
    $
    716,095
    
    
    $
    12,341
    
    
    
    6.99
    %Mortgage loans held for sale
    
    
    7,252
    
    
    
    77
    
    
    
    4.31
    
    
    
    2,401
    
    
    
    33
    
    
    
    5.57Investment securities:Taxable
    
    
    73,787
    
    
    
    1,108
    
    
    
    6.09
    
    
    
    65,111
    
    
    
    906
    
    
    
    5.64Tax-exempt (2)
    
    
    28,340
    
    
    
    399
    
    
    
    5.71
    
    
    
    21,871
    
    
    
    309
    
    
    
    5.73Total investment securities (3)
    
    
    102,127
    
    
    
    1,507
    
    
    
    5.98
    
    
    
    86,982
    
    
    
    1,215
    
    
    
    5.66Federal funds sold
    
    
    34,457
    
    
    
    24
    
    
    
    0.28
    
    
    
    38,196
    
    
    
    273
    
    
    
    2.90Restricted equity securities
    
    
    2,672
    
    
    
    
    
    
    
    0.00
    
    
    
    1,367
    
    
    
    14
    
    
    
    4.15Interest-bearing balances with banks
    
    
    19,479
    
    
    
    18
    
    
    
    0.37
    
    
    
    4,752
    
    
    
    53
    
    
    
    4.52Total interest-earning assets
    
    $
    1,158,457
    
    
    $
    14,058
    
    
    
    4.92
    %
    
    $
    849,793
    
    
    $
    13,929
    
    
    
    6.65
    %Non-interest-earning assets:Cash and due from banks
    
    
    18,669
    
    
    
    
    
    
    
    
    
    
    
    15,768Net fixed assets and equipment
    
    
    3,865
    
    
    
    
    
    
    
    
    
    
    
    4,181Allowance for loan losses, accrued
interest and other assets
    
    
    9,483
    
    
    
    
    
    
    
    
    
    
    
    2,198Total assets
    
    $
    1,190,474
    
    
    
    
    
    
    
    
    
    
    $
    871,940Liabilities and stockholders equity:Interest-bearing liabilities:Interest-bearing demand deposits
    
    $
    143,743
    
    
    $
    500
    
    
    
    1.41
    %
    
    $
    67,486
    
    
    $
    346
    
    
    
    2.08
    %Savings deposits
    
    
    852
    
    
    
    1
    
    
    
    0.48
    
    
    
    376
    
    
    
    1
    
    
    
    1.08Money market accounts
    
    
    629,453
    
    
    
    2,543
    
    
    
    1.64
    
    
    
    546,495
    
    
    
    4,217
    
    
    
    3.13Time deposits
    
    
    178,203
    
    
    
    1,349
    
    
    
    3.07
    
    
    
    99,830
    
    
    
    1,158
    
    
    
    4.70Other borrowings
    
    
    35,104
    
    
    
    498
    
    
    
    5.75
    
    
    
    2,858
    
    
    
    26
    
    
    
    3.69Total interest-bearing liabilities
    
    $
    987,355
    
    
    $
    4,891
    
    
    
    2.01
    
    
    $
    717,045
    
    
    $
    5,748
    
    
    
    3.25Non-interest-bearing liabilities:Non-interest-bearing demand
deposits
    
    
    111,806
    
    
    
    
    
    
    
    
    
    
    
    77,859Other liabilites
    
    
    1,990
    
    
    
    
    
    
    
    
    
    
    
    3,411Stockholders equity
    
    
    88,019
    
    
    
    
    
    
    
    
    
    
    
    72,559Unrealized gains on
securities and derivatives
    
    
    1,304
    
    
    
    
    
    
    
    
    
    
    
    1,066Total liabilities and
stockholders equity
    
    $
    1,190,474
    
    
    
    
    
    
    
    
    
    
    $
    871,940Net interest spread
    
    
    
    
    
    
    
    
    
    
    2.91
    %
    
    
    
    
    
    
    
    
    
    
    3.40
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.21
    %
    
    
    
    
    
    
    
    
    
    
    3.90
    %
 
 (1)
    
    Non-accrual loans are included in average loan balances in all periods. Loan fees of $136,000 and $298,000 are included in interest
income in 2009 and 2008, respectively.(2)
    
    Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 34%.(3)
    
    Unrealized gains of $1,760,000 and $1,435,000 are excluded from the yield calculation in 2009 and 2008, respectively.  28




---



##### Table of Contents



2009 Compared to 2008 Increase (Decrease)in Interest Income and Expense Due toChanges in:Volume
    
    
    Rate
    
    
    TotalInterest-earning assets:Loans, net of unearned income
    
    
    4,763
    
    
    
    (4,672
    )
    
    
    91Mortgages held for sale
    
    
    67
    
    
    
    (23
    )
    
    
    44Investment securities:Securities  taxable
    
    
    121
    
    
    
    81
    
    
    
    202Securities  non taxable
    
    
    91
    
    
    
    (1
    )
    
    
    90Federal funds sold
    
    
    (27
    )
    
    
    (222
    )
    
    
    (249
    )Restricted equity securities
    
    
    13
    
    
    
    (27
    )
    
    
    (14
    )Interest-bearing balances with banks
    
    
    164
    
    
    
    (199
    )
    
    
    (35
    )Total interest-earning assets
    
    
    5,192
    
    
    
    (5,063
    )
    
    
    129Interest-bearing liabilities:Interest-bearing demand deposits
    
    
    391
    
    
    
    (237
    )
    
    
    154Savings
    
    
    1
    
    
    
    (1
    )
    
    
    Money market accounts
    
    
    640
    
    
    
    (2,314
    )
    
    
    (1,674
    )Time deposits
    
    
    909
    
    
    
    (718
    )
    
    
    191Other borrowed funds
    
    
    293
    
    
    
    179
    
    
    
    472Total interest-bearing liabilities
    
    
    2,234
    
    
    
    (3,091
    )
    
    
    (857
    )Increase in net interest income
    
    
    2,958
    
    
    
    (1,972
    )
    
    
    986
 Provision for Loan Losses
  29




---



##### Table of Contents



Noninterest Income
  Noninterest Expense
  Income Tax Expense
  30




---



##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
      Economic Value of Equity Under Rate Shock
At March 31, 2009
 -200 bps
    
    -100 bps
    
    0 bps
    
    +100 bps
    
    +200 bps(Dollars in Thousands)Economic value of equity
    
    $
    96,232
    
    
    $
    86,494
    
    
    $
    91,226
    
    
    $
    93,437
    
    
    $
    94,688Actual dollar change
    
    $
    5,006
    
    
    $
    (4,732
    )
    
    
    
    
    
    $
    2,211
    
    
    $
    3,462Percent change
    
    
    5.49
    %
    
    
    -5.19
    %
    
    
    
    
    
    
    2.42
    %
    
    
    3.79
    %
 31




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 CEO and CFO Certification
  Evaluation of Disclosure Controls and Procedures
    32




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
      33




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##### Table of Contents



SIGNATURES
  SERVISFIRST BANCSHARES, INC.Date: May 6, 2009
    By
    /s/ Thomas A. Broughton, IIIThomas A. Broughton, IIIPresident and Chief Executive OfficerDate: May 6, 2009
    By
    /s/ William M. FosheeWilliam M. FosheeChief Financial Officer 34