ServisFirst reports Q2 2026 EPS of $1.57, up 40% YoY, with strong loan growth and margin expansion

ServisFirst disclosed its second quarter 2026 operating results through a press release. The 8-K body does not contain the actual financial figures; those are in the attached press release exhibit.

ServisFirst reported diluted EPS of $1.57 for Q2 2026, representing a 40% increase from $1.12 in Q2 2025. Net income was $85.8 million, up 39.7% year-over-year. The company's return on average assets improved to 1.91% from 1.40%, and return on average common stockholders' equity increased to 17.71% from 14.56%.

Total loans reached $14.48 billion at quarter-end, growing $533 million (15% annualized) from Q1 2026 and $1.25 billion (9.4%) year-over-year. Management noted strong momentum across markets with loan pipeline at record levels. Average loans for Q2 2026 were $14.22 billion, up $1.21 billion (9.3%) from Q2 2025.

Net interest margin improved to 3.63% in Q2 2026 from 3.53% in Q1 2026 and 3.10% in Q2 2025. Net interest income was $155.6 million, up from $148.1 million in Q1 2026 and $131.7 million in Q2 2025. The improvement was driven by higher loan yields (6.23% vs 6.18% prior quarter) and lower deposit costs (2.80% vs 3.33% year-ago). A $1.9 million interest recovery from a previously nonaccrual relationship contributed five basis points to the quarterly loan yield increase.

Nonperforming assets increased to 0.96% of total assets from 0.42% a year earlier, driven by a large real-estate secured relationship. However, credit performance improved sequentially: annualized net charge-offs declined to 0.11% from 0.25% in Q1 2026 and 0.20% in Q2 2025. The allowance for credit losses remained stable at 1.26% of total loans. The company recorded an $11.7 million provision for loan losses.

The efficiency ratio improved to 29.65% from 33.46% year-over-year, reflecting strong operating leverage. Common equity tier 1 capital ratio strengthened to 11.83% from 11.38%, and book value per share increased 14.8% to $36.19. The company maintained strong liquidity with $1.46 billion in cash and cash equivalents (8% of total assets) and no FHLB advances or brokered deposits.

The bank's net interest margin in the final month of Q2 2026 reached 3.59%, up from 3.53% in Q1 2026 and 3.35% in Q2 2025. This sequential improvement suggests the bank is earning more on its interest-earning assets relative to its funding costs, a positive trend for profitability.

The cost of total deposits fell to 2.21% at Q2 2026 quarter-end from 2.24% in Q1 2026 and 2.76% a year earlier. Interest-bearing deposit costs were 2.80%, down from 3.41% in Q2 2025. Lower funding costs support net interest margin expansion and indicate easing competitive pressure for deposits.

Noninterest bearing demand deposit account balances grew to $3.0M at Q2 2026 quarter-end, up from $2.8M in Q1 2026 and $2.632 billion a year earlier. These zero-cost deposits are valuable for funding and profitability, and the sequential growth reverses industry-wide migration to interest-bearing accounts.

The average rate on new loan originations and renewals in Q2 2026 was 6.33%, down from 6.44% in Q1 2026 and 7.07% a year earlier. This decline reflects the broader interest rate environment and may pressure future net interest income if deposit costs do not fall proportionately.

ServisFirst reported total available liquidity of $12.420 billion at Q2 2026 quarter-end, down slightly from $12.6M in Q1 2026 but up from $12.6M a year earlier. This includes on-balance-sheet liquidity, FHLB capacity, correspondent lines, brokered deposit availability, and Federal Reserve Bank funding access, providing substantial cushion for deposit outflows or loan growth.