##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C.
 
 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, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 000-53149
 SERVISFIRST BANCSHARES, INC.
  Delaware(State or Other Jurisdiction of 
Incorporation or Organization)
    
    26-0734029(I.R.S. Employer
Identification No.)3300 Cahaba Road, Suite 300Birmingham, Alabama
    
    35233(Address of Principal Executive Offices)
    
    (Zip Code)
 (205) 949-0302
 þ 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 May 27, 2008Common Stock, $.001 par value
    
    5,113,482




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##### 



TABLE OF CONTENTS
  
 PART I. FINANCIAL INFORMATION
    
    
    1Item 1. Financial Statements
    
    
    1Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    26PART II. OTHER INFORMATION
    
    
    27Item 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27Item 5. Other Information
    
    
    28Item 6. Exhibits
    
    
    28EX-31.01 SECTION 302, CERTIFICATION OF THE CEOEX-31.02 SECTION 302, CERTIFICATION OF THE CFOEX-32.01 SECTION 906, CERTIFICATION OF THE CEOEX-32.02 SECTION 906, CERTIFICATION OF THE CFO




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PART I. FINANCIAL INFORMATION
 
 ITEM 1.
FINANCIAL STATEMENTS
 SERVISFIRST BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share amounts)
 March 31,
2008
    
    
    December 31,Unaudited
    
    
    2007AssetsCash and due from banks
    
    $
    19,155
    
    
    $
    15,756Interest bearing balances due from depository institutions
    
    
    84
    
    
    
    34,068Federal funds sold
    
    
    83,455
    
    
    
    16,598Cash and cash equivalents
    
    
    102,694
    
    
    
    66,422Securities available for sale
    
    
    88,975
    
    
    
    87,233Restricted equity securities
    
    
    2,659
    
    
    
    1,202Mortgage loans held for sale
    
    
    4,768
    
    
    
    2,463Loans
    
    
    755,534
    
    
    
    675,281Less allowance for loan losses
    
    
    (8,852
    )
    
    
    (7,732
    )Loans, net
    
    
    746,682
    
    
    
    667,549Premises and equipment, net
    
    
    4,070
    
    
    
    4,176Accrued interest and dividends receivable
    
    
    3,936
    
    
    
    3,949Deferred tax assets
    
    
    2,515
    
    
    
    2,432Other assets
    
    
    3,916
    
    
    
    2,824Total assets
    
    $
    960,215
    
    
    $
    838,250Liabilities and Shareholders EquityLiabilities:Deposits:Noninterest-bearing
    
    $
    88,613
    
    
    $
    85,018Interest-bearing
    
    
    774,158
    
    
    
    677,665Total deposits
    
    
    862,771
    
    
    
    762,683Other borrowings
    
    
    20,275
    
    
    
    73Accrued interest payable
    
    
    900
    
    
    
    782Other liabilities
    
    
    1,626
    
    
    
    2,465Total liabilities
    
    
    885,572
    
    
    
    766,003Shareholders equity:Common stock, par value $.001 per share; 15,000,000 shares authorized;5,113,482 shares issued and outstanding
    
    
    5
    
    
    
    5Preferred stock, par value $.001 per share; 1,000,000 shares authorized;
no shares outstanding
    
    
    0
    
    
    
    0Additional paid-in capital
    
    
    63,320
    
    
    
    63,159Retained earnings
    
    
    9,652
    
    
    
    8,082Accumulated other comprehensive income
    
    
    1,666
    
    
    
    1,001Total shareholders equity
    
    
    74,643
    
    
    
    72,247Total liabilities and shareholders equity
    
    $
    960,215
    
    
    $
    838,250
 See Notes to Unaudited Consolidated Financial Statements.
 1




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SERVISFIRST BANCSHARES, INC.
 CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Unaudited)
(In thousands, except per share amounts)
 2008
    
    
    2007Interest income:Interest and fees on loans
    
    $
    12,374
    
    
    $
    9,469Taxable securities
    
    
    906
    
    
    
    256Nontaxable securities
    
    
    215
    
    
    
    133Federal funds sold
    
    
    273
    
    
    
    953Other interest and dividends
    
    
    67
    
    
    
    14Total interest income
    
    
    13,835
    
    
    
    10,825Interest expense:Deposits
    
    
    5,722
    
    
    
    5,225Borrowed funds
    
    
    26
    
    
    
    0Total interest expense
    
    
    5,748
    
    
    
    5,225Net interest income
    
    
    8,087
    
    
    
    5,600Provision for loan losses
    
    
    1,383
    
    
    
    643Net interest income after provision for loan losses
    
    
    6,704
    
    
    
    4,957Noninterest income:Service charges on deposit accounts
    
    
    256
    
    
    
    113Other operating income
    
    
    288
    
    
    
    150Total noninterest income
    
    
    544
    
    
    
    263Noninterest expenses:Salaries and employee benefits
    
    
    2,826
    
    
    
    1,866Equipment and occupancy expense
    
    
    530
    
    
    
    335Professional services
    
    
    316
    
    
    
    101Other operating expenses
    
    
    1,158
    
    
    
    603Total noninterest expenses
    
    
    4,830
    
    
    
    2,905Income before income taxes
    
    
    2,418
    
    
    
    2,315Provision for income taxes
    
    
    848
    
    
    
    808Net income
    
    $
    1,570
    
    
    $
    1,507Basic earnings per share
    
    $
    0.31
    
    
    $
    0.33Diluted earnings per share
    
    $
    0.30
    
    
    $
    0.33
 See Notes to Unaudited Consolidated Financial Statements.
 2




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SERVISFIRST BANCSHARES, INC.
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Unaudited)
(In thousands)
 2008
    
    
    2007Net income
    
    $
    1,570
    
    
    $
    1,507Other comprehensive income (loss), net of tax:Unrealized holding gains (losses) arising during period from securities available
for sale, net of tax (benefit) of $352, and $(19) for 2008, and 2007, respectively
    
    
    687
    
    
    
    (37
    )Unrealized holding gains arising during period from derivative, net of tax
of $35 and $8 for 2008 and 2007, respectively
    
    
    68
    
    
    
    18Reclassification adjustment for net gains realized on derivatives in net income, net of tax of $(46)
    
    
    (90
    )Other comprehensive income (loss)
    
    
    665
    
    
    
    (19
    )Comprehensive income
    
    $
    2,235
    
    
    $
    1,488
 See Notes to Unaudited Consolidated Financial Statements.
 3




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SERVISFIRST BANCSHARES, INC.
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(Unaudited)
(In thousands)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalCommon
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersStock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    EquityBalance, December 31, 2007
    
    $
    5
    
    
    $
    63,159
    
    
    $
    8,082
    
    
    $
    1,001
    
    
    $
    72,247Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    665
    
    
    
    665Stock based compensation expense
    
    
    
    
    
    
    161
    
    
    
    
    
    
    
    
    
    
    
    161Net income
    
    
    
    
    
    
    
    
    
    
    1,570
    
    
    
    
    
    
    
    1,570Balance, March 31, 2008
    
    $
    5
    
    
    $
    63,320
    
    
    $
    9,652
    
    
    $
    1,666
    
    
    $
    74,643
 See Notes to Unaudited Consolidated Financial Statements.
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SERVISFIRST BANCSHARES, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Unaudited)
(In thousands)
 2008
    
    
    2007OPERATING ACTIVITIESNet income
    
    $
    1,570
    
    
    $
    1,507Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Deferred tax benefit
    
    
    (174
    )
    
    
    (50
    )Provision for loan losses
    
    
    1,383
    
    
    
    643Depreciation and amortization
    
    
    225
    
    
    
    123Net amortization (accretion) of investments
    
    
    (77
    )
    
    
    34Amortized
gain on derivative
    
    
    (136
    )
    
    
    (Increase) decrease in accrued interest and dividends receivable
    
    
    13
    
    
    
    (151
    )Stock compensation expense
    
    
    161
    
    
    
    119Increase in accrued interest payable
    
    
    118
    
    
    
    172Proceeds from sale of mortgages held for sale
    
    
    16,873
    
    
    
    10,833Originations of mortgages held for sale
    
    
    (19,178
    )
    
    
    (9,003
    )Net change in other operating activities
    
    
    (977
    )
    
    
    (813
    )Net cash provided by (used in) operating activities
    
    
    (199
    )
    
    
    3,414INVESTING ACTIVITIESPurchases of securities available for sale
    
    
    (2,825
    )
    
    
    (10,383
    )Proceeds from maturities/calls, pay downs of securities available for sale
    
    
    2,201
    
    
    
    660Increase in loans
    
    
    (82,620
    )
    
    
    (26,898
    )Purchase of premises and equipment
    
    
    (119
    )
    
    
    (272
    )Purchase of restricted equity securities
    
    
    (1,456
    )
    
    
    (397
    )Proceeds
from sale of derivative
    
    
    1,000
    
    
    
    Net cash used in investing activities
    
    
    (83,819
    )
    
    
    (37,290
    )FINANCING ACTIVITIESNet increase in non-interest bearing deposits
    
    
    3,595
    
    
    
    10,014Net increase in interest bearing deposits
    
    
    96,493
    
    
    
    105,587Proceeds from other borrowings
    
    
    20,202
    
    
    
    Net cash provided by financing activities
    
    
    120,290
    
    
    
    115,601Net increase in cash and cash equivalents
    
    
    36,272
    
    
    
    81,725Cash and cash equivalents at beginning of period
    
    
    66,422
    
    
    
    53,335Cash and cash equivalents at end of period
    
    $
    102,694
    
    
    $
    135,060
 See Notes to Unaudited Consolidated Financial Statements.
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Notes to Consolidated Financial Statements (Unaudited)
 Note 1  General
   Note 2  Cash and Cash Flows
  March 31,2008
    
    2007(In Thousands)Interest paid
    
    $
    5,630
    
    
    $
    5,053Income taxes paid
    
    $
    1,250
    
    
    $
    850Transfers of loans to other real estate owned
    
    $
    2,085
    
    
    $
    
 Note 3  Earnings Per Common Share
  6




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March 31,2008
    
    2007(Thousands, Except Share andPer Share Amounts)Weighted average common shares outstanding
    
    
    5,113,482
    
    
    
    4,463,606Net income
    
    $
    1,570
    
    
    $
    1,507Basic earnings per common share
    
    $
    0.31
    
    
    $
    0.33Weighted average common shares outstanding
    
    
    5,113,482
    
    
    
    4,463,606Dilutive effects of assumed conversions
and exercises of stock options and
warrants
    
    
    170,435
    
    
    
    14,784Weighted average common and dilutive
potential common shares outstanding
    
    
    5,283,917
    
    
    
    4,478,390Net income
    
    $
    1,570
    
    
    $
    1,507Diluted earnings per common share
    
    $
    0.30
    
    
    $
    0.33
 Note 4  Employee and Director Benefits
 Stock Options
     March 31,2008
    
    2007Expected volatility
    
    
    20.00
    %
    
    
    20.00
    %Expected dividends
    
    
    .50
    %
    
    
    .50
    %Expected term in years
    
    7 years
    
    
    7 yearsRisk-free rate
    
    
    2.93
    %
    
    
    4.47
    %
 7




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WeightedAverageWeighted
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateExercise
    
    
    Term
    
    
    IntrinsicShares
    
    
    Price
    
    
    (years)
    
    
    Value(In Thousands)Outstanding January 1, 2008
    
    
    712,500
    
    
    $
    13.12
    
    
    
    8.43
    
    
    $
    4,905Granted
    
    
    13,500
    
    
    
    20.00
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2008
    
    
    726,000
    
    
    $
    13.24
    
    
    
    8.24
    
    
    
    4,905Exercisable at March 31, 2008
    
    
    20,000
    
    
    $
    10.00
    
    
    
    7.14
    
    
    $
    200
 Stock Warrants
  Year EndedDecember 31,2005Expected volatility
    
    
    20.00
    %Expected dividends
    
    
    0.00
    %Expected term (in years)
    
    3 yearsRisk-free rate
    
    
    3.69
    %
  Note 5  Adoption of New Accounting Interpretations
 The Fair Value Option for Financial Assets and Financial Liabilities  Including an
Amendment of FASB Statement No. 115
 8




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Fair Value Measurements, Effective Date FASB Statement No. 157.
 Note 6  Recent Accounting Pronouncements
 Disclosures about Derivative Instruments and Hedging
Activities-an amendment of FASB No. 133.
 Note 7  Fair Value Measurement
 Fair value Measurements
   9




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Fair Value Measurement at March 31, 2008QuotedPrices inActiveMarkets
    
    
    Significantfor
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    Total(Dollar amounts in thousands)Assets Measured on a Recurring
Basis:Available-for-sale securities (1)
    
    $
    
    
    
    $
    88,975
    
    
    
    
    
    
    $
    88,975Total assets at fair value
    
    $
    
    
    
    $
    88,975
    
    
    
    
    
    
    $
    88,975Assets measured on a Nonrecurring
Basis:Impaired loans
    
    $
    
    
    
    
    
    
    
    $
    13,502
    
    
    $
    13,502
 
 (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.
Therefore, certain financial assets and financial liabilities not carried at fair value, such
as the Companys investment in the Federal Home Loan Bank are still reported at their carrying
values. 10




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Forward Looking Statements
  Overview
    11




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Significant Accounting Policies
  Financial Condition
 Investment Securities
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gain
    
    
    Loss
    
    
    Value(In Thousands)As of March 31, 2008:Securities available for sale:Mortgage backed securities
    
    $
    61,300
    
    
    $
    1,531
    
    
    $
    (23
    )
    
    $
    62,808State and municipal securities
    
    
    25,839
    
    
    
    427
    
    
    
    (99
    )
    
    
    26,167Total
    
    $
    87,139
    
    
    $
    1,958
    
    
    $
    (122
    )
    
    $
    88,975As of December 31, 2007:Securities available for sale:Mortgage backed securities
    
    $
    62,162
    
    
    $
    471
    
    
    $
    (30
    )
    
    $
    62,603State and municipal securities
    
    
    24,271
    
    
    
    374
    
    
    
    (15
    )
    
    
    24,630Total
    
    $
    86,433
    
    
    $
    845
    
    
    $
    (45
    )
    
    $
    87,233
 12




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Lessthan
    
    
    
    
    
    
    Five
    
    
    Moreone
    
    
    One year to
    
    
    years to
    
    
    than tenyear
    
    
    five years
    
    
    ten years
    
    
    years
    
    
    Total(In Thousands)As of March 31, 2008Mortgage backed securities
    
    $
    
    
    
    $
    3,227
    
    
    $
    29,314
    
    
    $
    28,759
    
    
    $
    61,300State and municipal
securities
    
    $
    
    
    
    $
    823
    
    
    $
    25,016
    
    
    $
    
    
    
    $
    25,839Total
    
    $
    
    
    
    $
    4,050
    
    
    $
    54,330
    
    
    $
    28,759
    
    
    $
    87,139
   Loans
  March 31,
    
    
    December 31,2008
    
    
    2007(In Thousands)Commercial, financial and agricultural
    
    $
    239,266
    
    
    $
    219,684Real estate  construction
    
    
    220,940
    
    
    
    195,238Real estate  mortgage:Owner occupied
    
    
    91,148
    
    
    
    89,0141-4 family
    
    
    79,872
    
    
    
    64,325Other
    
    
    97,210
    
    
    
    83,663Total real estate mortgage
    
    
    268,230
    
    
    
    237,002Consumer
    
    
    27,098
    
    
    
    23,357Total loans
    
    
    755,534
    
    
    
    675,281Less allowance for loan losses
    
    
    (8,852
    )
    
    
    (7,732
    )Net loans
    
    $
    746,682
    
    
    $
    667,549
 13




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Asset Quality
   Three MonthsEnded March 31,2008
    
    
    2007Allowance for Loan LossesBalance at beginning of period
    
    $
    7,732
    
    
    $
    5,418Charge-offs:Commercial, financial and agricultural
    
    
    (1
    )
    
    
    (21
    )Real estate  construction
    
    
    (279
    )
    
    
    Real estate  mortgage
    
    
    
    
    
    
    Owner occupied
    
    
    
    
    
    
    1-4 family mortgage
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Total real estate mortgage
    
    
    
    
    
    
    Consumer
    
    
    (2
    )
    
    
    (2
    )Total charge-offs
    
    
    (282
    )
    
    
    (23
    )Recoveries:Commercial, financial and agricultural
    
    
    19
    
    
    
    Real estate  construction
    
    
    
    
    
    
    Real estate  mortgage
    
    
    
    
    
    
    Owner occupied
    
    
    
    
    
    
    1-4 family mortgage
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Total real estate mortgage
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    Total recoveries
    
    
    19
    
    
    
    Net charge  offs
    
    
    (263
    )
    
    
    (23
    )Provision for loan losses charged to expense
    
    
    1,383
    
    
    
    643Allowance for loan losses at end of period
    
    $
    8,852
    
    
    $
    6,038As a percentage of year to date average loans:Annualized net charge-offs
    
    
    0.15
    %
    
    
    0.02
    %Annualized provision for loan losses
    
    
    0.77
    %
    
    
    0.57
    %
 14




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March 31,
    
    December 31,2008
    
    
    2007
    
    
    
    
    

   2007Percentage
    
    
    
    
    
    Percentage
    
    
    
    
    
    Percentageof loans in
    
    
    
    
    
    of loans in
    
    
    
    
    
    of loans ineach
    
    
    
    
    
    each
    
    
    
    
    
    eachcategory of
    
    
    
    
    
    category of
    
    
    
    
    
    category ofAmount
    
    total loans
    
    Amount
    
    total loans
    
    Amount
    
    total loans(Dollars in Thousands)Commercial,
financial and
agricultural
    
    $
    1,633
    
    
    
    31.50
    %
    
    $
    2,192
    
    
    
    35.60
    %
    
    $
    1,714
    
    
    
    32.53
    %Real estate 
construction
    
    
    4,133
    
    
    
    29.24
    %
    
    
    3,415
    
    
    
    36.55
    %
    
    
    3,487
    
    
    
    28.91
    %Real estate 
mortgage
    
    
    408
    
    
    
    35.67
    %
    
    
    320
    
    
    
    24.70
    %
    
    
    340
    
    
    
    35.10
    %Consumer
    
    
    10
    
    
    
    3.59
    %
    
    
    104
    
    
    
    3.15
    %
    
    
    12
    
    
    
    3.46
    %Other
    
    
    2,668
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    2,179
    
    
    
    Total
    
    $
    8,852
    
    
    
    100.00
    %
    
    $
    6,038
    
    
    
    100.00
    %
    
    $
    7,732
    
    
    
    100.00
    %
 Non-performing Assets
    15




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##### Table of Contents



March 31,
    
    
    December 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2007(Dollars in Thousands)Non-accrual loans
    
    $
    2,683
    
    
    
    4,284
    
    
    
    2Loans 90 days or more past due and
still accruing
    
    $
    0
    
    
    
    187
    
    
    
    128All other real estate owned
    
    $
    3,443
    
    
    
    1,623
    
    
    
    369Total non-performing assets
    
    $
    6,126
    
    
    
    6,094
    
    
    
    499
    Deposits
   Other Borrowings
   16




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##### Table of Contents



Liquidity
      17




---



##### Table of Contents



Payments due by Period(In Thousands)Less
    
    
    
    
    
    
    
    
    
    
    Morethan 1
    
    
    1-3
    
    
    4-5
    
    
    than 5Total
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    YearsContractual Obligations (1)Deposits without a stated
maturity
    
    $
    736,368
    
    
    
    736,368
    
    
    
    
    
    
    
    
    
    
    
    Certificates of deposit (2)
    
    $
    126,403
    
    
    
    111,954
    
    
    
    11,172
    
    
    
    3,277FHLB borrowings
    
    $
    20,000
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    Other borrowings
    
    $
    275
    
    
    
    275
    
    
    
    
    
    
    
    
    
    
    
    Operating lease commitments
    
    $
    5,971
    
    
    
    915
    
    
    
    1,509
    
    
    
    1,085
    
    
    
    2,462Total
    
    $
    889,017
    
    
    
    849,512
    
    
    
    12,681
    
    
    
    24,362
    
    
    
    2,462
 
 (1)
    
    Excludes interest(2)
    
    Certificates of deposit give customers the right to early withdrawal. Early withdrawals
may be subject to penalties. The penalty amount depends on the remaining time to maturity
at the time of early withdrawal. Capital Adequacy
   18




---



##### Table of Contents



To Be WellCapitalizedUnderFor
    
    PromptCapital
    
    CorrectiveAdequacy
    
    ActionActual
    
    Purposes
    
    ProvisionsServisFirst
    
    ServisFirstBancshares
    
    BankMarch 31, 2008Total Capital to Risk Weighted Assets
    
    
    10.26
    %
    
    
    10.28
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 Capital to Risk Weighted Assets
    
    
    9.15
    %
    
    
    9.17
    %
    
    
    4.00
    %
    
    
    6.00
    %Tier 1 Capital to Average Assets
    
    
    8.37
    %
    
    
    8.38
    %
    
    
    4.00
    %
    
    
    5.00
    %December 31, 2007Total Capital to Risk Weighted Assets
    
    
    11.22
    %
    
    
    11.22
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 Capital to Risk Weighted Assets
    
    
    10.12
    %
    
    
    10.12
    %
    
    
    4.00
    %
    
    
    6.00
    %Tier 1 Capital to Average Assets
    
    
    8.40
    %
    
    
    8.40
    %
    
    
    4.00
    %
    
    
    5.00
    %March 31, 2007Total Capital to Risk Weighted Assets
    
    
    N/A
    
    
    
    11.85
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 Capital to Risk Weighted Assets
    
    
    N/A
    
    
    
    10.66
    %
    
    
    4.00
    %
    
    
    6.00
    %Tier 1 Capital to Average Assets
    
    
    N/A
    
    
    
    9.39
    %
    
    
    4.00
    %
    
    
    5.00
    %
 Off-balance sheet arrangements
    (In Thousands)Commitments to extend credit beyond current fundings
    
    
    281,265Credit card arrangements
    
    
    6,990Standby letters of credit and financial guarantees
    
    
    19,242Total
    
    
    307,497


19




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##### Table of Contents



Derivatives
  Net Income
  Net Interest Income
  20




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##### Table of Contents



Average Consolidated Balance Sheet and Net Interest Analysis on a FullyTax Equivalent BasisThree Months Ended March 31,2008
    
    
    
    
    
    
    
    
    
    
    2007Average
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate(Dollar Amounts In Thousands)Assets:Interest-earning assets:Loans, net of
unearned income(1)
    
    $
    716,095
    
    
    $
    12,341
    
    
    
    6.91
    %
    
    $
    450,234
    
    
    $
    9,436
    
    
    
    8.50
    %Mortgage loans held for
sale
    
    
    2,401
    
    
    
    33
    
    
    
    5.50
    %
    
    
    1,208
    
    
    
    33
    
    
    
    10.95
    %Investment securities:Taxable
    
    
    65,111
    
    
    
    906
    
    
    
    5.58
    %
    
    
    18,720
    
    
    
    256
    
    
    
    5.56
    %Tax-exempt (2)(3)
    
    
    21,871
    
    
    
    215
    
    
    
    5.67
    %
    
    
    13,391
    
    
    
    133
    
    
    
    5.79
    %Total investment
securities (3)
    
    
    86,982
    
    
    
    1,121
    
    
    
    5.68
    %
    
    
    32,111
    
    
    
    389
    
    
    
    5.65
    %Federal funds sold
    
    
    38,196
    
    
    
    273
    
    
    
    2.86
    %
    
    
    74,471
    
    
    
    953
    
    
    
    5.19
    %Restricted equity
securities
    
    
    1,367
    
    
    
    14
    
    
    
    4.22
    %
    
    
    831
    
    
    
    13
    
    
    
    6.59
    %Interest bearing
balances
with banks
    
    
    4,752
    
    
    
    53
    
    
    
    4.41
    %
    
    
    30
    
    
    
    1
    
    
    
    4.09
    %Total interest-earning
assets
    
    
    849,793
    
    
    
    13,835
    
    
    
    6.65
    %
    
    
    558,885
    
    
    
    10,825
    
    
    
    7.90
    %Non-interest earning
assetsCash and due from banks
    
    
    15,768
    
    
    
    
    
    
    
    
    
    
    
    12,568Net fixed assets
    
    
    4,181
    
    
    
    
    
    
    
    
    
    
    
    2,688Allowance for loan
losses,
accrued interest and
other assets
    
    
    2,198
    
    
    
    
    
    
    
    
    
    
    
    (418
    )Total assets
    
    $
    871,940
    
    
    
    
    
    
    
    
    
    
    $
    573,723
 21




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##### Table of Contents



Average Consolidated Balance Sheet and Net Interest Analysis on a FullyTax Equivalent BasisThree Months Ended March 31,2008
    
    
    
    
    
    
    
    
    
    
    2007Average
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate(Dollar Amounts In Thousands)Liabilities and
stockholders
equity:Interest-bearing
liabilities:Interest bearing demand
Deposits
    
    $
    67,486
    
    
    $
    346
    
    
    
    2.06
    %
    
    $
    43,974
    
    
    $
    257
    
    
    
    3.78
    %Savings deposits
    
    
    376
    
    
    
    1
    
    
    
    0.99
    %
    
    
    157
    
    
    
    1
    
    
    
    1.46
    %Money market accounts
    
    
    546,495
    
    
    
    4,217
    
    
    
    3.09
    %
    
    
    355,747
    
    
    
    4,371
    
    
    
    4.98
    %Time deposits
    
    
    99,830
    
    
    
    1,158
    
    
    
    4.65
    %
    
    
    46,483
    
    
    
    596
    
    
    
    5.20
    %Federal funds purchased
    
    
    0
    
    
    
    0
    
    
    
    0Other borrowings
    
    
    2,858
    
    
    
    26
    
    
    
    3.13
    %
    
    
    0
    
    
    
    0
    
    
    
    0Total interest- bearing
Liabilities
    
    
    717,045
    
    
    
    5,748
    
    
    
    3.21
    %
    
    
    446,361
    
    
    
    5,225
    
    
    
    4.75
    %Non-interest liabilitiesNon-interest bearing
demand deposits
    
    
    77,859
    
    
    
    
    
    
    
    
    
    
    
    71,411Other liabilities
    
    
    3,411
    
    
    
    
    
    
    
    
    
    
    
    2,576Stockholders equity
    
    
    72,559
    
    
    
    
    
    
    
    
    
    
    
    53,451Accumulated other
Comprehensive income
(loss)
    
    
    1,066
    
    
    
    
    
    
    
    
    
    
    
    (76
    )Total liabilities and
Stockholders equity
    
    $
    871,940
    
    
    
    
    
    
    
    
    
    
    $
    573,723Net interest spread
    
    
    
    
    
    
    
    
    
    
    3.44
    %
    
    
    
    
    
    
    
    
    
    
    3.15
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.81
    %
    
    
    
    
    
    
    
    
    
    
    3.92
    %
 
 (1)
    
    Non-accrual loans are included in average loan balances in all years. Loan fees of $298,000
and $330,000 are included in interest income in 2008 and 2007, respectively.(2)
    
    Interest income and yields are presented on a fully taxable equivalent basis using a tax rate
of 34%.(3)
    
    Unrealized gains (losses) of $1,435,000 and ($157,000) are excluded from the yield
calculation in 2008 and 2007, respectively.  22




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##### Table of Contents



Change in Interest Income and Expense on a Tax-Equivalent BasisThree Months Ended March 31, 2008Compared to Three
Months Ended March 31, 2007Volume
    
    
    Rate
    
    
    Total(In thousands)Interest-earning assets:Loans, net of unearned income
    
    $
    5,572
    
    
    
    (2,667
    )
    
    
    2,905Investment securities:Taxable
    
    
    635
    
    
    
    15
    
    
    
    650Tax-exempt
    
    
    84
    
    
    
    (2
    )
    
    
    82Federal funds sold
    
    
    (464
    )
    
    
    (216
    )
    
    
    (680
    )Restricted equity securities
    
    
    9
    
    
    
    (9
    )
    
    
    0Other earning assets
    
    
    33
    
    
    
    20
    
    
    
    53Total earning assets
    
    $
    5,869
    
    
    
    (2,859
    )
    
    
    3,010Interest-bearing
liabilitiesInterest-bearing demand deposits
    
    $
    137
    
    
    
    (48
    )
    
    
    89Savings deposits
    
    
    1
    
    
    
    (1
    )
    
    
    0Money market accounts
    
    
    2,344
    
    
    
    (2,499
    )
    
    
    (155
    )Time deposits
    
    
    685
    
    
    
    (122
    )
    
    
    563Other borrowings
    
    
    26
    
    
    
    0
    
    
    
    26Total interest-bearing liabilities
    
    $
    3,193
    
    
    
    (2,670
    )
    
    
    523Increase in net interest income
    
    $
    2,676
    
    
    
    (189
    )
    
    
    2,487
 Provision for Loan Losses
  23




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##### Table of Contents



Noninterest Income
   Noninterest Expense
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  24




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##### Table of Contents



Economic Value of Equity Under Rate ShockAt March 31, 2008-200bps
    
    -100bps
    
    0bps
    
    +100bps
    
    +200bps(Dollars in Thousands)Economic value of
equity
    
    
    68,287
    
    
    
    71,235
    
    
    
    74,327
    
    
    
    78,306
    
    
    
    81,768Actual dollar change
    
    
    (6,040
    )
    
    
    (3,092
    )
    
    
    
    
    
    
    3,979
    
    
    
    7,441Percent change
    
    
    (7.26
    )%
    
    
    (3.72
    )%
    
    
    
    
    
    
    4.78
    %
    
    
    8.94
    %
  25




---



##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 CEO and CFO Certification
 Evaluation of Disclosure Controls and Procedures
   26




---



##### 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
   NAME
    
    FOR
    
    WITHHELDStanley M. Brock
    
    
    3,186,808
    
    
    
    6,000Thomas A. Broughton III
    
    
    3,186,808
    
    
    
    6,000J. Richard Cashio
    
    
    3,186,808
    
    
    
    6,000James J. Filler
    
    
    3,186,808
    
    
    
    6,000Michael D. Fuller
    
    
    3,186,808
    
    
    
    6,000Hatton C. V. Smith
    
    
    3,186,808
    
    
    
    6,000
 27




---



##### Table of Contents



FOR
    
    AGAINST
    
    ABSTAIN3,182,108
    
    
    6,700
    
    
    
    4,000
 
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 (a)
    
    Exhibit:
 31.01
    
    Certification of principal executive officer pursuant to Rule 13a-14(a).31.02
    
    Certification of principal financial officer pursuant to Rule 13a-14(a).32.01
    
    Certification of principal executive officer pursuant to 18 U.S.C. Section 1350.32.02
    
    Certification of principal financial officer pursuant to 18 U.S.C. Section 1350.
 28




---



##### Table of Contents



SIGNATURES
  SERVISFIRST BANCSHARES, INC.Date:  May 27, 2008
    By
    /s/ Thomas A. Broughton, IIIThomas A. Broughton, IIIPresident and Chief Executive Officer Date:  May 27, 2008
    By
    /s/ William M. FosheeWilliam M. FosheeChief Financial Officer 29