ServisFirst Bancshares, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA   The financial statements and supplementary data required by Regulations S-X and by Item 302 of Regulation S‑K are set forth in the pages listed below.                           Page             Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements     63   Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting     65   Consolidated Balance Sheets at December 31, 2022 and 2021     66   Consolidated Statements of Income for the Years Ended December 31, 2022, 2021 and 2020     67   Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021 and 2020     68   Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2022, 2021 and 2020     69   Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020     70   Notes to Consolidated Financial Statements     71           62     Report of Independent Registered Public Accounting Firm   To the Stockholders and Board of Directors ServisFirst Bancshares, Inc.   Opinion on the Consolidated Financial Statements   We have audited the accompanying consolidated balance sheets of ServisFirst Bancshares, Inc. and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).  In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.   We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2023, expressed an unqualified opinion thereon.   Basis for Opinion   These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on the Company’s financial statements based on our audits.   We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.   Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.  We believe that our audits provide a reasonable basis for our opinion.   Critical Audit Matter   The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.  The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.   63     Allowance for Credit Losses on Loans   As described in Notes 1 and 3 to the financial statements, the Company’s loan portfolio and the associated allowance for credit losses (“allowance”) were $11.7 billion and $146.3 million as of December 31, 2022, respectively. The amount of the allowance represents management’s best estimate of current expected credit losses on loans considering the loan portfolios, past loan loss experience, current asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payment), the estimated value of any underlying collateral, composition of the loan portfolio, current and projected economic conditions, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. As further described in Notes 1 and 3 to the financial statements, to calculate the allowance, loans with similar risk characteristics are collectively evaluated in pools and loans that do not share similar risk characteristics are excluded from the collective pools and evaluated on an individual basis. Management evaluates each loan pool utilizing a discounted cash flow, probability of default / loss given default or remaining life method, depending on the nature of the loan pool. Losses are predicted over a period of time determined to be reasonable and supportable, and after such period, losses are reverted to long term historical averages. The estimated credit losses for each loan pool are then adjusted for qualitative factors not inherently considered in the quantitative analyses. Consideration is given to the following factors:  lending policy, changes in nature and volume of loans, staff experience, changes in volume and trends of problem loans, concentration risk, trends in underlying collateral values, external factors, quality of loan review system and other economic conditions. Estimating qualitative factor adjustments requires significant judgment and can either increase or decrease the quantitative model estimation.   We identified the allowance for credit losses, and more specifically the qualitative factor adjustments applied in the allowance, as a critical audit matter. The principal considerations for our determination of the qualitative factor adjustments as a critical audit matter are the subjectivity of the assumptions that management utilized in determining and applying qualitative factors in the allowance model. Furthermore, certain inputs and assumptions lack observable data and, therefore, applying audit procedures required a higher degree of auditor judgment and subjectivity due to the nature and extent of audit evidence and effort required to address this matter.   The primary audit procedures we performed to address this critical audit matter included:     ● Evaluated the design and tested the operating effectiveness of key controls relating to the Company’s allowance, including controls over the determination of qualitative factor adjustments, the precision of management’s review and approval of the resulting estimate, and testing of the model’s performance.     ● Assessed the appropriateness and reasonableness of the qualitative factor adjustment framework, including evaluating management’s judgments as to which factors and relevant assessed risks impacted the qualitative adjustments for each loan pool.     ● Evaluated and tested the reasonableness and relevance of data utilized in the qualitative factor adjustments, including considering the data’s completeness and accuracy and testing the mathematical accuracy of the calculations.     ● Utilized the assistance of the firm’s internal specialists to test the mathematical operation of the model and to evaluate the reasonableness of assumptions and judgments used in forecast components.     ● Analyzed the total qualitative factor adjustment applied to each loan pool, in comparison to changes in the Company’s quantitatively driven expected credit losses and loan pools and evaluated the appropriateness and level of the total qualitative factor adjustment applied in the overall allowance.   /s/ FORVIS, LLP   (Formerly, Dixon Hughes Goodman LLP)   We have served as the Company’s auditor since 2014.   Atlanta, Georgia   February 28, 2023     64     Report of Independent Registered Public Accounting Firm   To the Stockholders and Board of Directors   ServisFirst Bancshares, Inc.   Opinion on the Internal Control over Financial Reporting   We have audited ServisFirst Bancshares, Inc. and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.   We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2022 and 2021, and for each of the three years in the period ended December 31, 2022, and our report dated February 28, 2023, expressed an unqualified opinion on those consolidated financial statements.   Basis for Opinion   The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.  Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.   We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audit in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audit also included performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinion.   Definitions and Limitations of Internal Control over Financial Reporting   A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.   /s/ FORVIS, LLP   (Formerly, Dixon Hughes Goodman LLP)   Atlanta, Georgia   February 28, 2023   65       SERVISFIRST BANCSHARES, INC. AND SUBSIDIARIES   CONSOLIDATED BALANCE SHEETS   (In thousands, except share and per share amounts)         December 31, 2022     December 31, 2021   ASSETS                 Cash and due from banks   $ 106,317     $ 56,934   Interest-bearing balances due from depository institutions     708,221       4,106,790   Federal funds sold     1,515       58,372   Cash and cash equivalents     816,053       4,222,096   Available for sale debt securities, at fair value     644,815       842,570   Held to maturity debt securities (fair value of $ 935,953 at December 31, 2022 and $ 466,286 at December 31, 2021)     1,034,121       462,957   Restricted equity securities     7,734       7,311   Mortgage loans held for sale     1,607       1,114   Loans     11,687,968       9,532,934   Less allowance for credit losses     ( 146,297 )     ( 116,660 ) Loans, net     11,541,671       9,416,274   Premises and equipment, net     59,850       60,300   Accrued interest and dividends receivable     48,422       34,831   Deferred tax asset, net     60,448       37,772   Other real estate owned and repossessed assets     248       1,208   Bank owned life insurance contracts     287,752       283,074   Goodwill and other identifiable intangible assets     13,615       13,638   Other assets     79,417       65,661   Total assets   $ 14,595,753     $ 15,448,806   LIABILITIES AND STOCKHOLDERS' EQUITY                 Liabilities:                 Deposits:                 Non-interest-bearing demand   $ 3,321,347     $ 4,799,767   Interest-bearing     8,225,458       7,653,069   Total deposits     11,546,805       12,452,836   Federal funds purchased     1,618,798       1,711,777   Other borrowings     64,726       64,706   Accrued interest and dividends payable     18,615       13,619   Other liabilities     48,913       53,853   Total liabilities     13,297,857       14,296,791   Stockholders' equity:                 Preferred stock, par value $ 0.001 per share; 1,000,000 authorized and undesignated at December 31, 2022 and December 31, 2021     -       -   Common stock, par value $ 0.001 per share; 200,000,000 shares authorized, 54,326,527 shares issued and outstanding at December 31, 2022; and 100,000,000 shares authorized, 54,227,060 shares issued and outstanding at December 31, 2021     54       54   Additional paid-in capital     229,693       226,397   Retained earnings     1,109,902       911,008   Accumulated other comprehensive (loss) income     ( 42,253 )     14,056   Total stockholders' equity attributable to ServisFirst Bancshares, Inc.     1,297,396       1,151,515   Noncontrolling interest     500       500   Total stockholders' equity     1,297,896       1,152,015   Total liabilities and stockholders' equity   $ 14,595,753     $ 15,448,806     See Notes to Consolidated Financial Statements.                   66       SERVISFIRST BANCSHARES, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF INCOME   (In thousands, except per share amounts)         Year Ended December 31,       2022     2021     2020   Interest income:                         Interest and fees on loans   $ 499,691     $ 385,721     $ 362,664   Taxable securities     40,722       25,413       22,122   Nontaxable securities     137       302       739   Federal funds sold     1,556       29       332   Other interest and dividends     17,209       4,840       3,165   Total interest income     559,315       416,305       389,022   Interest expense:                         Deposits     59,396       26,569       45,230   Borrowed funds     29,027       5,233       5,755   Total interest expense     88,423       31,802       50,985   Net interest income     470,892       384,503       338,037   Provision for credit losses     37,607       31,517       42,434   Net interest income after provision for credit losses     433,285       352,986       295,603   Noninterest income:                         Service charges on deposit accounts     8,033       6,839       7,528   Mortgage banking     2,438       7,340       8,747   Credit card income     9,917       7,347       5,916   Securities (losses) gains     ( 6,168 )     620       -   Increase in cash surrender value life insurance     6,478       6,642       6,310   Other operating income     12,661       4,664       1,615   Total noninterest income     33,359       33,452       30,116   Noninterest expenses:                         Salaries and employee benefits     77,952       67,728       61,414   Equipment and occupancy expense     12,319       11,404       10,070   Third party processing and other services     27,333       16,362       13,778   Professional services     4,277       3,891       4,242   FDIC and other regulatory assessments     4,565       5,679       4,354   Other real estate owned expense     295       868       2,163   Other operating expenses     31,075       27,157       15,490   Total noninterest expenses     157,816       133,089       111,511   Income before income taxes     308,828       253,349       214,208   Provision for income taxes     57,324       45,615       44,639   Net income     251,504       207,734       169,569   Dividends on preferred stock     62       62       63   Net income available to common stockholders   $ 251,442     $ 207,672     $ 169,506   Basic earnings per common share   $ 4.63     $ 3.83     $ 3.15   Diluted earnings per common share   $ 4.61     $ 3.82     $ 3.13     See Notes to Consolidated Financial Statements.           67       SERVISFIRST BANCSHARES, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME   (In thousands)         Year Ended December 31,       2022     2021     2020   Net income   $ 251,504     $ 207,734     $ 169,569   Other comprehensive (loss) income, net of tax:                         Unrealized net holding (losses) gains arising during period from securities available for sale, net of tax of $ (19,336) , $ (2,705) and $ 3,845 for 2022, 2021, and 2020, respectively     ( 59,768 )     ( 10,181 )     14,469   Amortization of net unrealized (losses) on securities transferred from available-for-sale to held-to-maturity, net of tax of ($375) and ($319) for 2022 and 2021, respectively     ( 1,414 )     ( 1,196 )     -   Reclassification adjustment for securities transferred from available-for-sale to held-to-maturity net of tax of $ 1,480 for 2021     -       5,705       -   Reclassification adjustment for net losses (gains) on call and sale of securities, net of tax of $ 1,295 and $ (130) , for 2022 and 2021, respectively     4,873       ( 490 )     -   Other comprehensive (loss) income, net of tax     ( 56,309 )     ( 6,162 )     14,469   Comprehensive income   $ 195,195     $ 201,572     $ 184,038     See Notes to Consolidated Financial Statements.     68       SERVISFIRST BANCSHARES, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY   (In thousands, except share amounts)   Year Ended December 31,         Common Shares     Preferred Stock     Common Stock     Additional Paid-in Capital     Retained Earnings     Accumulated Other Comprehensive Income (loss)     Non- controlling Interest     Total Stockholders' Equity   Balance, January 1, 2020     53,623,740     $ -     $ 54     $ 219,766     $ 616,611     $ 5,749     $ 502     $ 842,682   Common dividends paid, $ 0.525 per share     -       -       -       -       ( 28,230 )     -       -       ( 28,230 ) Common dividends declared, $ 0.20 per share     -       -       -       -       ( 10,787 )     -       -       ( 10,787 ) Preferred dividends paid     -       -       -       -       ( 63 )     -       -       ( 63 ) Exit tax credit partnership     -       -       -       -       -       -       (2 )     (2 ) Impact of adopting ASC 326     -       -       -       -       1,124       -       -       1,124   Issue restricted shares pursuant to stock incentives, net of forfeitures     33,195       -       -       -       -       -       -       -   Issue shares of common stock upon exercise of stock options     286,816       -       -       3,487       -       -       -       3,487   16,862 shares of common stock withheld in net settlement upon exercise of stock options     -       -       -       ( 729 )     -       -       -       ( 729 ) Stock-based compensation expense     -       -       -       1,332       -       -       -       1,332   Other comprehensive income, net of tax     -       -       -       -       -       14,469       -       14,469   Net income     -       -       -       -       169,569       -       -       169,569   Balance, December 31, 2020     53,943,751     $ -     $ 54     $ 223,856     $ 748,224     $ 20,218     $ 500     $ 992,852   Common dividends paid, $ 0.60 per share     -       -       -       -       ( 32,520 )     -       -       ( 32,520 ) Common dividends declared, $ 0.23 per share     -       -       -       -       ( 12,472 )     -       -       ( 12,472 ) Preferred dividends paid     -       -       -       -       ( 62 )     -       -       ( 62 ) Dividends on nonvested restricted stock recognized as compensation expense     -       -       -       -       104       -       -       104   Issue restricted shares pursuant to stock incentives, net of forfeitures     57,570       -       -       -       -       -       -       -   Issue shares of common stock upon exercise of stock options     225,739       -       -       3,534       -       -       -       3,534   52,461 shares of common stock withheld in net settlement upon exercise of stock options     -       -       -       ( 2,848 )     -       -       -       ( 2,848 ) Stock-based compensation expense     -       -       -       1,855       -       -       -       1,855   Other comprehensive (loss), net of tax     -       -       -       -       -       ( 6,162 )     -       ( 6,162 ) Net income     -       -       -       -       207,734       -       -       207,734   Balance, December 31, 2021     54,227,060     $ -     $ 54     $ 226,397     $ 911,008     $ 14,056     $ 500     $ 1,152,015   Common dividends paid, $ 0.69 per share     -       -       -       -       ( 37,470 )     -       -       ( 37,470 ) Common dividends declared, $ 0.28 per share     -       -       -       -       ( 15,211 )     -       -       ( 15,211 ) Preferred dividends paid     -       -       -       -       ( 62 )     -       -       ( 62 ) Dividends on nonvested restricted stock recognized as compensation expense     -       -       -       -       133       -       -       133   Issue restricted shares pursuant to stock incentives, net of forfeitures     42,765       -       -       -       -       -       -       -   Issue shares of common stock upon exercise of stock options     56,702       -       -       1,232       -       -       -       1,232   13,798 shares of common stock withheld in net settlement upon exercise of stock options     -       -       -       ( 1,143 )     -       -       -       ( 1,143 ) Stock-based compensation expense     -       -       -       3,207       -       -       -       3,207   Other comprehensive (loss), net of tax     -       -       -       -       -       ( 56,309 )     -       ( 56,309 ) Net income     -       -       -       -       251,504       -       -       251,504   Balance, December 31, 2022     54,326,527     $ -     $ 54     $ 229,693     $ 1,109,902     $ ( 42,253 )   $ 500     $ 1,297,896     See Notes to Consolidated Financial Statements.     69       SERVISFIRST BANCSHARES, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF CASH FLOWS   (In thousands)         Year Ended December 31,       2022     2021     2020   OPERATING ACTIVITIES                         Net income   $ 251,504     $ 207,734     $ 169,569   Adjustments to reconcile net income to net cash provided by operating activities:                         Deferred tax     ( 2,615 )     ( 5,061 )     ( 9,727 ) Provision for credit losses     37,607       31,517       42,434   Depreciation     4,100       4,118       3,832   Accretion on acquired loans     157       43       ( 100 ) Amortization of core deposit intangible     23       270       271   Amortization of investments in tax credit partnerships     11,716       6,840       -   Net amortization of debt securities available for sale     2,581       14,665       5,605   (Increase) decrease in accrued interest and dividends receivable     ( 13,591 )     2,010       ( 10,579 ) Stock-based compensation expense     3,207       1,855       1,332   Increase in accrued interest and dividends payable     4,996       1,298       387   Proceeds from sale of mortgage loans held for sale     50,922       234,086       284,881   Originations of mortgage loans held for sale     ( 48,977 )     ( 213,435 )     ( 284,247 ) Loss (gain) on sale of securities available for sale     6,168       ( 620 )     -   Gain on sale of mortgage loans held for sale     ( 2,438 )     ( 7,340 )     ( 8,747 ) Net (gain) loss on sale of other real estate owned and repossessed assets     ( 501 )     288       ( 8 ) Write down of other real estate owned and repossessed assets     225       845       1,861   Operating losses of tax credit partnerships     -       4       4   Increase in cash surrender value of life insurance contracts     ( 6,478 )     ( 6,642 )     ( 6,310 ) Net change in other assets, liabilities, and other operating activities     ( 25,980 )     ( 6,144 )     832   Net cash provided by operating activities     272,627       266,331       191,290   INVESTMENT ACTIVITIES                         Purchases of debt securities available for sale     ( 76,360 )     ( 416,903 )     ( 334,596 ) Proceeds from maturities, calls and paydowns of debt securities available for sale     115,750       177,166       220,993   Proceeds from sale of debt securities available for sale     75,036       5,000       -   Purchases of debt securities held to maturity     ( 648,266 )     ( 290,769 )     -   Proceeds from maturities, calls and paydowns of debt securities held to maturity     75,311       94,797       -   Purchases of restricted equity securities     ( 423 )     ( 7,311 )     -   Investment in tax credit partnerships and SBIC     ( 20,277 )     ( 43,912 )     ( 636 ) Return of capital from tax credit partnerships and SBIC     434       -       -   Increase in loans     ( 2,164,114 )     ( 1,072,363 )     ( 1,236,698 ) Purchases of premises and equipment     ( 3,650 )     ( 9,449 )     ( 2,305 ) Purchase of bank owned life insurance contracts     -       ( 45 )     ( 60,682 ) Proceeds from death benefit of bank owned life insurance contracts     2,153       -       -   Proceeds from sale of other real estate owned and repossessed assets     2,282       2,695       2,853   Expenditures for other real estate owned     ( 93 )     -       -   Net cash used in investing activities     ( 2,642,217 )     ( 1,561,094 )     ( 1,411,071 ) FINANCING ACTIVITIES                         Net (decrease) increase in non-interest-bearing deposits     ( 1,478,420 )     2,010,995       1,038,893   Net increase in interest-bearing deposits     572,389       466,117       1,406,398   Net (decrease) increase in federal funds purchased     ( 92,979 )     860,232       380,796   Proceeds from issuance of 4 % Subordinated Notes due October 21, 2030, net of issuance cost     -       -       34,750   Repayment of 5 % Subordinated Notes due July 15, 2025     -       -       ( 34,710 ) Proceeds from exercise of stock options     1,232       3,534       3,487   Taxes paid in net settlement of tax obligation upon exercise of stock options     ( 1,143 )     ( 2,848 )     ( 729 ) Dividends paid on common stock     ( 37,470 )     ( 32,520 )     ( 28,230 ) Dividends paid on preferred stock     ( 62 )     ( 62 )     ( 63 ) Net cash (used in) provided by financing activities     ( 1,036,453 )     3,305,448       2,800,592   Net (decrease) increase in cash and cash equivalents     ( 3,406,043 )     2,010,685       1,580,811   Cash and cash equivalents at beginning of period     4,222,096       2,211,411       630,600   Cash and cash equivalents at end of period   $ 816,053     $ 4,222,096     $ 2,211,411   SUPPLEMENTAL DISCLOSURE                         Cash paid/(received) for:                         Interest   $ 83,427     $ 30,504     $ 50,598   Income taxes     68,665       56,651       50,867   Income tax refund     ( 142 )     ( 3 )     ( 47 ) NONCASH TRANSACTIONS                         Other real estate acquired in settlement of loans   $ 1,046     $ 2,318     $ 2,945   Internally financed sale of other real estate owned     -       3,779       40   Debt securities available for sale transferred to held to maturity     -       261,026       -   Dividends on nonvested restricted stock reclassified as compensation expense     133       104       -   Dividends declared     15,211       12,472       10,787     70     SERVISFIRST BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 1.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Nature of Operations   ServisFirst Bancshares, Inc. (the “Company”) was formed on August 16, 2007 and is a bank holding company whose business is conducted by its wholly owned subsidiary ServisFirst Bank (the “Bank”). The Bank is headquartered in Birmingham, Alabama, and has provided a full range of banking services to individual and corporate customers throughout the Birmingham market since opening for business in May 2005. The Bank has since expanded into the Huntsville, Montgomery, Dothan and Mobile, Alabama, Pensacola, Sarasota, Tallahassee, and Tampa Bay, Florida, Atlanta, Georgia, Charleston, South Carolina, Charlotte and Asheville, North Carolina and Nashville, Tennessee markets. The Bank owns all of the stock of SF Intermediate Holding Company, Inc., which, in turn, owns all of the stock of SF TN Realty Holdings, Inc., which, in turn, owns all of the common stock of the Company’s real estate investment trusts, SF Realty 1, Inc., SF FLA Realty, Inc., SF GA Realty, Inc. and SF TN Realty, Inc. More details about SF Intermediate Holding Company, Inc. and its subsidiaries are included in Note 11.   Reclassification   Certain amounts reported in prior years have been reclassified to conform to the current year’s presentation. These reclassifications had no effect on the Company’s results of operations, financial position, or net cash flow.   Basis of Presentation and Accounting Estimates   To prepare consolidated financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for credit losses, valuation of deferred tax assets and the fair value of financial instruments are particularly subject to change. All numbers are in thousands except share and per share data.   Basis of Consolidation   The consolidated financial statements include the accounts of the Company and other entities in which it has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. Non-controlling interest consists of preferred shares in the Company's real estate investment trusts, SF Realty 1, Inc., SF FLA Realty, Inc., SF GA Realty, Inc. and SF TN Realty, Inc. that are owned by third parties.  The preferred shares in the real estate investment trusts receive dividends, which are included in the consolidated statements of income shown as income to non-controlling interest, and are redeemable at the Company's option.    Cash, Due from Banks, Interest-Bearing Balances due from Financial Institutions   Cash and due from banks include cash on hand, cash items in process of collection, amounts due from banks and interest bearing balances due from financial institutions. For purposes of cash flows, cash and cash equivalents include cash and due from banks and federal funds sold. Generally, federal funds are purchased and sold for one -day periods. Cash flows from loans, mortgage loans held for sale, federal funds sold, and deposits are reported net.   Debt Securities   Debt securities are classified based on the Company’s intention on the date of purchase. All debt securities classified as available-for-sale are recorded at fair value with any unrealized gains and losses reported in accumulated other comprehensive income (loss), net of the deferred income tax effects. Debt securities that the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and are carried at historical cost and adjusted for amortization of premiums and accretion of discounts.   Transfers of debt securities into the held-to-maturity category from available-for-sale category are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in other comprehensive income and in the carrying value of the held-to-maturity securities. Such amounts are amortized over the remaining life of the security.   Interest and dividends on securities, including amortization of premiums and accretion of discounts calculated under the effective interest method, are included in interest income. For certain securities, amortization of premiums and accretion of discounts is computed based on the anticipated life of the security which may be shorter than the stated life of the security. Realized gains and losses from the sale of securities are determined using the specific identification method and are recorded on the trade date of the sale.   71     Restricted Equity Securities   Investments in restricted equity securities without a readily determinable market value are carried at cost.   Mortgage Loans Held for Sale   The Company classifies certain residential mortgage loans as held for sale. Typically, mortgage loans held for sale are sold to a third -party investor within a very short time period. The loans are sold without recourse and servicing is not retained. Net fees earned from this banking service are recorded in noninterest income.   In the course of originating mortgage loans and selling those loans in the secondary market, the Company makes various representations and warranties to the purchaser of the mortgage loans. Each loan is underwritten using government agency guidelines. Any exceptions noted during this process are remedied prior to sale. These representations and warranties also apply to underwriting the real estate appraisal opinion of value for the collateral securing these loans. Under the representations and warranties, failure by the Company to comply with the underwriting and/or appraisal standards could result in the Company being required to repurchase the mortgage loan or to reimburse the investor for losses incurred (make whole requests) if such failure cannot be cured by the Company within the specified period following discovery. The Company continues to experience an insignificant level of investor repurchase demands. There were no expenses incurred as part of these buyback obligations for the years ended December 31, 2022 and 2021.   Loans   Loans are reported at unpaid principal balances, less unearned fees and the allowance for credit losses. Interest on all loans is recognized as income based upon the applicable rate applied to the daily outstanding principal balance of the loans. Interest income on nonaccrual loans is recognized on a cash basis or cost recovery basis until the loan is returned to accrual status. A loan may be returned to accrual status if the Company is reasonably assured of repayment of principal and interest and the borrower has demonstrated sustained performance for a period of at least six months. Loan fees, net of direct costs, are reflected as an adjustment to the yield of the related loan over the term of the loan. The Company does not have a concentration of loans to any one industry.   The accrual of interest on loans is discontinued when there is a significant deterioration in the financial condition of the borrower and full repayment of principal and interest is not expected or the principal or interest is more than 90 days past due, unless the loan is both well-collateralized and in the process of collection. Generally, all interest accrued but not collected for loans that are placed on nonaccrual status are reversed against current interest income. Interest collections on nonaccrual loans are generally applied as principal reductions. The Company determines past due or delinquency status of a loan based on contractual payment terms.   Troubled debt restructurings (“TDRs”) are concessions granted to borrowers in the normal course of business, which would not otherwise be considered, where the borrowers are experiencing financial difficulty. The concessions granted most frequently for TDRs involve reductions or delays in required payments of principal and interest for a specified time, the rescheduling of payments in accordance with a bankruptcy plan or the charge-off of a portion of the loan. In some cases, the conditions of the credit also warrant nonaccrual status, even after the restructure occurs. As part of the credit approval process, the restructured loans are evaluated for adequate collateral protection in determining the appropriate accrual status at the time of restructure. TDR loans may be returned to accrual status if there has been at least a six -month sustained period of repayment performance by the borrower.   Allowance for Credit Losses ( “ ACL ” ) and Impairment of Debt Securities   As described below under Recently Adopted Accounting Pronouncements, the Company adopted Accounting Standards Update (“ASU”)  2016 - 13 ,   Financial Instruments-Credit Losses (Topic   326 ): Measurement of Credit Losses on Financial Instruments (“CECL”) Accounting Standard Codification (“ASC”) 326 effective January 1, 2020.   ACL – Debt Securities Held to Maturity   Management uses a systematic methodology to determine its ACL for held-to-maturity debt securities. The ACL is a contra-asset valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the held-to-maturity portfolio. Management considers the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the portfolio. The Company’s estimate of its ACL involves a high degree of judgment; therefore, Management’s process for determining expected credit losses may result in a range of expected credit losses. Management monitors the held-to-maturity portfolio to determine whether an ACL would need to be recorded. As of December 31, 2022 and 2021, the Company had $ 1.03 billion and $ 463.0 million, respectively, of held-to-maturity securities and no related ACL recorded, respectively.   72     Impairment of Debt Securities Available for Sale   For available-for-sale debt securities in an unrealized loss position, the Company will first assess whether i) it intends to sell or ii) it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis. If either case is applicable, any previously recognized allowances are charged off and the debt security’s amortized cost is written down to fair value through income. If neither case is applicable, the debt security is evaluated to determine whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the debt security by a rating agency and any adverse conditions specifically related to the debt security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the debt security are compared to the amortized cost basis of the debt security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount by which the fair value is less than the amortized cost basis. Any impairment that has not been recorded through allowance for credit losses is recognized in other comprehensive income, net of tax.   Adjustments to the allowance are reported in the income statement as a component of credit loss expense. Debt securities are charged off against the allowance or, in the absence of any allowance, written down through income when deemed uncollectible by the Company or when either of the aforementioned criteria regarding intent or requirement to sell is met specifically for available-for-sale debt securities.   The Company excludes the accrued interest receivable balance from the amortized cost basis in measuring expected credit losses on debt securities and does not record an ACL on accrued interest receivable.   ACL – Loans   The ACL is based on the Company’s evaluation of the loan portfolios, past loan loss experience, current asset quality trends, known and inherent risks in the portfolio, adverse situations that  may  affect the borrower’s ability to repay (including the timing of future payment), the estimated value of any underlying collateral, composition of the loan portfolio, economic conditions, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. The process is inherently subjective and subject to significant change as it requires material estimates. The allowance is increased by a provision for credit losses, which is charged to expense, and reduced by charge-offs, net of recoveries. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for credit losses. Such agencies may require the Company to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination.   Loans with similar risk characteristics are evaluated in pools and, depending on the nature of each identified pool, the Company utilizes a discounted cash flow (“DCF”), probability of default / loss given default (“PD/LGD”) or remaining life method. The historical loss experience estimate by pool is then adjusted by forecast factors that are quantitatively related to the Company’s historical credit loss experience, such as national unemployment rates and gross domestic product. Losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable period losses are reverted to long term historical averages. The reasonable and supportable period and reversion period are re-evaluated each quarter by the Company and are dependent on the current economic environment among other factors.   The estimated credit losses for each loan pool are then adjusted for changes in qualitative factors not inherently considered in the quantitative analyses. The qualitative adjustments either increase or decrease the quantitative model estimation. The Company considers factors that are relevant within the qualitative framework which include the following: lending policy, changes in nature and volume of loans, staff experience, changes in volume and trends of problem loans, concentration risk, trends in underlying collateral values, external factors, quality of loan review system and other economic conditions.   Credit losses for loans that  no  longer share similar risk characteristics with the collectively evaluated pools are excluded from the collective evaluation and estimated on an individual basis. Individual evaluations are performed for nonaccrual loans, loans rated substandard, and modified loans classified as troubled debt restructurings. Specific allowances were estimated based on  one  of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows.   The Company measures expected credit losses over the contractual term of a loan, adjusted for estimated prepayments. The contractual term excludes expected extensions, renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring will be executed. Credit losses are estimated on the amortized cost basis of loans, which includes the principal balance outstanding, purchase discounts and premiums and deferred loan fees and costs. Accrued interest receivable on loans is excluded from the estimate of credit losses.   73     ACL – Unfunded Loan Commitments   The ACL is a liability account representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a contractual obligation to extend credit. No allowance is recognized if the Company has the unconditional right to cancel the obligation. The ACL is reported as a component of other liabilities within the Consolidated Balance Sheets. Adjustments to the ACL for unfunded commitments are reported in the Consolidated Income Statements  as a component of other operating expense.   Foreclosed Real Estate   Foreclosed real estate includes both formally foreclosed property and in-substance foreclosed property. At the time of foreclosure, foreclosed real estate is recorded at fair value less cost to sell, which becomes the property’s new basis. Any write downs based on the asset’s fair value at date of acquisition are charged to the allowance for credit losses. After foreclosure, these assets are carried at the lower of their new cost basis or fair value less cost to sell. Costs incurred in maintaining foreclosed real estate and subsequent adjustments to the carrying amount of the property are included in other operating expenses.   Premises and Equipment   Land is carried at cost. Premises and equipment are carried at cost less accumulated depreciation. Expenditures for additions and major improvements that significantly extend the useful lives of the assets are capitalized. Expenditures for repairs and maintenance are charged to expense as incurred. Assets which are disposed of are removed from the accounts and the resulting gains or losses are recorded in operations. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets ( 3 to 39.5 years).   Leasehold improvements are amortized on a straight-line basis over the lesser of the lease terms or the estimated useful lives of the improvements.   Leases   The Company leases certain office space and equipment under operating leases. Leases are recognized as a liability to make lease payments and as an asset representing the right to use the asset during the lease term, or “lease liability” and “right-of-use asset,” respectively. The lease liability is measured as the present value of remaining lease payments, discounted at the Company’s incremental borrowing rate.  The Company reports its right-of-use assets in other assets and its lease liabilities in other liabilities within the Consolidated Balance Sheets.   Certain of the leases include  one  or more renewal options that extend the initial lease term  1  to  5  years. The exercise of lease renewal options is typically at the Company’s sole discretion; therefore, a majority of renewals to extend lease terms are  not  included in the right-of-use assets and lease liabilities as they are  not  reasonably certain to be exercised. Renewal options are regularly evaluated and when they are reasonably certain to be exercised, are included in lease terms.   None  of the Company’s leases provide an implicit discount rate. The Company uses its incremental collateralized borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.   The Company does not recognize short-term leases on its Consolidated Balance Sheets.  A short-term operating lease has an original term of 12 months or less and does not have a purchase option that is likely to be exercised.   Bank Owned Life Insurance ( “ BOLI ” )   BOLI is comprised of long-term life insurance contracts on the lives of certain current and past employees where the insurance policy benefit and ownership are retained by the employer. Its cash surrender value is an asset that the Company uses to partially offset the future cost of employee benefits. The cash surrender value accumulation on BOLI is permanently tax deferred if the policy is held to the insured person’s death and certain other conditions are met.   Goodwill and Other Identifiable Intangible Assets   The Company has recorded $ 13.6 million of goodwill at December 31, 2022 in connection with the acquisition of Metro Bancshares, Inc. in 2015. The Company tests its goodwill for impairment annually unless interim events or circumstances make it more likely than not that an impairment loss has occurred. Impairment is defined as the amount by which the carrying value of a reporting unit exceeds its fair value. Impairment losses, if incurred, would be charged to operating expense. For the purposes of evaluating goodwill, the Company has determined that it operates only one reporting unit.   74     Other identifiable intangible assets include a core deposit intangible recorded in connection with the acquisition of Metro Bancshares, Inc. The core deposit intangible was fully amortized as of January of 2022.   Derivatives and Hedging Activities   As part of its overall interest rate risk management, the Company uses derivative instruments, which can include interest rate swaps, caps, and floors. All derivative instruments are carried at fair value on the Consolidated Balance Sheets. Accounting standards provide special accounting provisions for derivative instruments that qualify for hedge accounting. To be eligible, the Company must specifically identify a derivative as a hedging instrument and identify the risk being hedged. The derivative instrument must be shown to meet specific requirements under this accounting standard.   The Company designates the derivative on the date the derivative contract is entered into as a hedge of the ( 1 ) fair value of a recognized asset or liability or of an unrecognized firm commitment (a “fair-value” hedge) or ( 2 ) a forecasted transaction of the variability of cash flows to be received or paid related to a recognized asset or liability (a “cash-flow” hedge). Changes in the fair value of a derivative that is highly effective as a fair-value hedge, and that is designated and qualifies as a fair-value hedge, along with the loss or gain on the hedged asset or liability that is attributable to the hedged risk (including losses or gains on firm commitments), are recorded in current-period earnings. The changes in a derivative’s fair value for a derivative that is highly effective and that is designated and qualifies as a cash-flow hedge are recorded in other comprehensive income until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings).   The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair-value or cash-flow hedges to specific assets and liabilities on the Consolidated Balance Sheets or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, as necessary, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively, as discussed below. The Company discontinues hedge accounting prospectively when: ( 1 ) it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of a hedged item (including firm commitments or forecasted transactions); ( 2 ) the derivative expires or is sold, terminated, or exercised; ( 3 ) the derivative is re-designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur; ( 4 ) a hedged firm commitment no longer meets the definition of a firm commitment; or ( 5 ) management determines that designation of the derivative as a hedge instrument is no longer appropriate.   When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair-value hedge, hedge accounting is discontinued prospectively and the derivative will continue to be carried on the balance sheet at its fair value with all changes in fair value being recorded in earnings but with no offsetting fair value adjustment being recorded on the hedged item. For a discontinued cash flow hedge the change in fair value is no longer recorded in other comprehensive income.   The Company uses derivatives to hedge interest rate exposures associated with mortgage loan originations. Interest rate lock commitments related to loans that are originated for later sale are classified as derivatives.  In the normal course of business, the Company regularly extends these rate lock commitments to customers during the loan origination process.  The fair values of the Company’s rate lock commitments to customers as of December 31, 2022 and 2021 were not material and have not been recorded.   Revenue Recognition   The Company recognizes revenue from contracts with customers in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606” ) . The guidance requires recognition of revenue to depict the transfer of goods or services from contracts with customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.   75     While the majority of the Company’s revenue-generating transactions are excluded from the model for contracts with customers, including revenue generated from financial instruments, such as securities and loans, relevant revenue-generating transactions are classified within non-interest income and are described as follows:     • Deposit account service charges – represent service fees for monthly activity and maintenance on customer accounts. Attributes can be transaction-based, item-based or time-based. Revenue is recognized when our performance obligation is completed which is generally monthly for maintenance services or when a transaction is processed. Payment for such performance obligations are generally received at the time the performance obligations are satisfied.     • Credit card rewards program membership fees – represent memberships in our credit card rewards program and are paid annually by our cardholders at the time they open an account and on each anniversary. Revenue is recognized ratably over the membership period.   Other non-interest income primarily includes income on bank owned life insurance contracts, letter of credit fees and gains on sale of loans held for sale.   Income Taxes   Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.   The Company uses the provisions of ASC 740 - 10, Income Taxes. ASC 740 - 10 establishes a single model to address accounting for uncertain tax positions which prescribes a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. There is a two -step process in the evaluation of a tax position. The first step is recognition. A Company determines whether it is more likely than not that a tax position will be sustained upon examination, including a resolution of any related appeals or litigation processes, based upon the technical merits of the position. The second step is measurement. A tax position that meets the more likely than not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.   Stock-Based Compensation   At December 31, 2022, the Company had a stock-based compensation plan for grants of equity compensation to key employees and directors. The plan has been accounted for under the provisions of GAAP with respect to employee stock options, restricted stock and performance-based stock. Specifically, awards are accounted for using the fair value-based method of accounting. Stock compensation costs are recognized prospectively for all new awards granted under the stock-based compensation plans. Compensation expense related to stock options is calculated using a method that is based on the underlying assumptions of the Black-Scholes-Merton option pricing model and is charged to expense over the requisite service period (e.g. vesting period). Compensation expense related to restricted stock awards is based upon the fair value of the awards on the date of grant and is charged to earnings over the requisite service period of the award. Performance shares represent the opportunity to earn shares of the Company’s common stock after a prescribed period and based on the relative market performance of the Company’s stock, subject to the recipient’s continued employment through the end of the performance period. The actual shares earned under the performance shares units generally range between zero and 150 % of the target level award, depending on the total stockholder return (TSR) of the Company over the performance period ranked relative to the TSR of a defined peer group of companies. A Monte Carlo simulation is used to estimate the fair value of the performance shares as of the valuation date. Compensation expense is recognized regardless of the extent to which the market condition is satisfied.   Earnings per Common Share   Basic earnings per common share are computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under stock options and performance shares.   Loan Commitments and Related Financial Instruments   Financial instruments, which include credit card arrangements, commitments to make loans and standby letters of credit, are issued to meet customer financing needs.  The face amount for these items represents the exposure to loss before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded.  Instruments such as stand-by letters of credit are considered, and accounted for as, financial guarantees.  The fair value of these financial guarantees is not material.   76     Fair Value of Financial Instruments   Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 21. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.   Comprehensive Income   Comprehensive income consists of net income and other comprehensive income. Accumulated comprehensive (loss) income, which is recognized as a separate component of equity, includes unrealized gains and losses on available-for-sale debt securities and amortization of unrealized gains and losses on debt securities transferred from available-for-sale to held-to-maturity at the time of transfer. Amounts reported as accumulated comprehensive income are shown net of taxes.   Advertising   Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2022, 2021 and 2020 was $ 447,000 , $ 499,000 and $ 338,000 , respectively. Advertising typically consists of local print media aimed at businesses that the Company targets as well as sponsorships of local events in which the Company’s clients and prospects are involved.   Recently Adopted Accounting Pronouncements   In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016 - 13, Financial Instruments-Credit Losses (Topic 326 ): Measurement of Credit Losses on Financial Instruments, which is essentially the final rule on use of the so-called CECL model, or current expected credit losses. Among other things, ASC 326 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Financial institutions and other organizations now use forward-looking information to better inform their credit loss estimates. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The Company adopted ASC 326 effective January 1, 2020. Amounts reported for periods beginning on or after January 1, 2020 are presented under ASC 326, except quarterly periods in 2020, which were not restated under CECL and all prior period information is presented in accordance with previously applicable GAAP. Based on prevailing economic conditions and forecasts as of January 1, 2020, the Company recognized a cumulative net increase to retained earnings of $ 1.1 million, net of tax, attributable to a decrease in the allowance for credit losses of $ 2.0 million, an increase in the allowance for off balance sheet credit exposures of $ 500,000 , and a decrease in deferred tax assets of $ 376,000 . This was the result of implementing a more quantitative methodology. The commercial, financial, and agricultural loan category decreased $ 8.2 million due to the portfolio primarily consisting of loans with generally short contractual maturities. This was partially offset by an increase of $ 6.2 million in the real estate – construction loan category due to the application of peer loss rates within the discounted cash flow pool reserve methodology. Peer historical loss rates were utilized to better align with loss expectations given the Company’s low historical loss experience in this category.   In  March 2020 ,  the FASB issued ASU  2020 - 04,   Reference Rate Reform (Topic   848 ): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The update provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The guidance is intended to help stakeholders during the global market-wide reference rate transition period. Therefore, it will be effective for a limited time, starting  March 12, 2020  through  December 31, 2024 as recently amended by the FASB.  The Company has identified a replacement reference rate established by the American Financial Exchange. This rate is based on an active market of daily fund trading among participant banks. The Company is applying the guidance provided by this ASU in transitioning to the new reference rate.   In  August 2021 ,  the FASB issued ASU  No.   2021 - 06   Presentation of Financial Statements (Topic   205 ), Financial Services — Depository and Lending (Topic   942 ), and Financial Services — Investment Companies (Topic   946 ): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases   No.   33 - 10786,   Amendments to Financial Disclosures about Acquired and Disposed Businesses, and   No.   33 - 10835,   Update of Statistical Disclosures for Bank and Savings and Loan Registrants . This ASU amends and adds various SEC paragraphs to the codification pursuant to the issuance of SEC Final Rule Releases  No .   33 - 10786  and  No.   33 - 10835  issued to improve disclosure rules. The ASU was effective upon issuance. The adoption of this disclosure guidance did  not  have a material impact on the Company's consolidated financial statements.   77     In  July 2021 ,  the FASB issued ASU  2021 - 05,   Leases (Topic   842 ) :  Lessors-Certain Leases with Variable Lease Payments , which amends guidance so that lessors are  no  longer required to record a selling loss at lease commencement for a lease with any variable lease payments that do  not  depend on an index or rate. A lessor would classify such leases as an operating lease rather than a sales-type or direct financing lease. The adoption of ASU 2021 - 05 as of January 1, 2022 did not have a material impact on the Company’s consolidated financial statements.   Recent Accounting Pronouncements   In March 2022, the FASB issued ASU 2022 - 02, Financial Instruments — Credit Losses (Topic 326 ): Troubled Debt Restructurings and Vintage Disclosures . The update eliminates the TDR recognition and measurement guidance and, instead, requires that an entity evaluate whether all modifications represent a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of loans made to borrowers experiencing financial difficulty. These amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326 - 20. The update is effective for entities that have adopted ASU No. 2016 - 13 (the CECL model) for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. These amendments should be applied prospectively, except that an entity has the option to apply a modified retrospective transition method to the recognition and measurement of TDRs. Early adoption is permitted if an entity has adopted ASU No. 201613, including adoption in an interim period as of the beginning of the fiscal year that includes the interim period. An entity may elect to early adopt the amendments about TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The Company is assessing the impact of adopting the update on its financial statements and disclosures and is currently planning to adopt effective January 1, 2023.   In June 2022, the FASB issued ASU 2022 - 03, Fair Value Measurement (Topic 820 ): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . The update clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This update is effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted. The Company is assessing the impact of adopting the update on its financial statements and disclosures.     NOTE 2.           DEBT SECURITIES   The amortized cost and fair values of available-for-sale and held-to-maturity debt securities at December 31, 2022 and 2021 are summarized as follows:               Gross     Gross               Amortized     Unrealized     Unrealized     Market       Cost     Gain     Loss     Value   December 31, 2022   (In Thousands)   Debt Securities Available for Sale                                 U.S. Treasury Securities   $ 3,002     $ -     $ ( 33 )   $ 2,969   Government Agency Securities     9       -       -       9   Mortgage-backed securities     282,480       5       ( 32,782 )     249,703   State and municipal securities     15,205       1       ( 1,597 )     13,609   Corporate debt     406,680       -       ( 28,155 )     378,525   Total   $ 707,376     $ 6     $ ( 62,567 )   $ 644,815   Debt Securities Held to Maturity                                 U.S. Treasury Securities   $ 507,151     $ -     $ ( 36,197 )   $ 470,954   Mortgage-backed securities     518,929       7       ( 60,960 )     457,976   State and municipal securities     8,041       -       ( 1,018 )     7,023   Total   $ 1,034,121     $ 7     $ ( 98,175 )   $ 935,953                                     December 31, 2021                                 Debt Securities Available for Sale                                 U.S Treasury Securities   $ 9,003     $ 101     $ -     $ 9,104   Government Agency Securities     6,022       19       -       6,041   Mortgage-backed securities     424,372       3,474       ( 2,685 )     425,161   State and municipal securities     21,531       173       ( 70 )     21,634   Corporate debt     369,618       11,659       ( 647 )     380,630   Total   $ 830,546     $ 15,426     $ ( 3,402 )   $ 842,570   Debt Securities Held to Maturity                                 U.S. Treasury Securities   $ 149,263     $ 25     $ ( 668 )   $ 148,620   Mortgage-backed securities     310,641       5,251       ( 1,271 )     314,621   State and municipal securities     3,053       2       ( 10 )     3,045   Total   $ 462,957     $ 5,278     $ ( 1,949 )   $ 466,286     78     During the  third  quarter of  2021,  the Company transferred, at fair value, $ 261.3  million of mortgage-backed securities from the available-for-sale portfolio to the held-to-maturity portfolio. The related unrealized after-tax gains of $ 5.6  million remained in accumulated other comprehensive income and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities.  No  gains or losses were recognized at the time of the transfer.   All mortgage-backed debt securities are issued by government sponsored enterprises (GSEs) such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.   At December 31, 2022 and 2021, there were no holdings of debt securities of any issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.   The amortized cost and fair value of debt securities as of December 31, 2022 and 2021 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers may have the right to call or prepay obligations with or without call or prepayment penalties.       December 31, 2022     December 31, 2021       Amortized Cost     Market Value     Amortized Cost     Market Value       (In Thousands)   Debt securities available for sale                                 Due within one year   $ 24,712     $ 24,432     $ 32,913     $ 33,232   Due from one to five years     58,554       57,092       31,760       32,307   Due from five to ten years     338,630       311,100       338,407       348,594   Due after ten years     3,000       2,488       3,094       3,276   Mortgage-backed securities     282,480       249,703       424,372       425,161       $ 707,376     $ 644,815     $ 830,546     $ 842,570                                     Debt securities held to maturity                                 Due within one year   $ 250     $ 250     $ 250     $ 250   Due from one to five years     386,465       366,095       49,663       49,419   Due from five to ten years     128,477       111,632       102,403       101,996   Due after ten years     -       -       -       -   Mortgage-backed securities     518,929       457,976       310,641       314,621       $ 1,034,121     $ 935,953     $ 462,957     $ 466,286     The following table identifies the Company’s investment securities that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months, as of December 31, 2022 and 2021.       Less Than Twelve Months     Twelve Months or More     Total       Gross             Gross             Gross               Unrealized             Unrealized             Unrealized               Losses     Fair Value     Losses     Fair Value     Losses     Fair Value       (In Thousands)   December 31, 2022                                                 Debt Securities available for sale                                                 U.S. Treasury Securities   $ ( 33 )   $ 2,969     $ -     $ -     $ ( 33 )   $ 2,969   Government Agency Securities     -       9       -       -       -       9   Mortgage-backed securities     ( 3,473 )     60,234       ( 29,309 )     189,109       ( 32,782 )     249,343   State and municipal securities     ( 186 )     5,283       ( 1,411 )     7,880       ( 1,597 )     13,163   Corporate debt     ( 18,566 )     304,254       ( 9,589 )     63,411       ( 28,155 )     367,666   Total   $ ( 22,258 )   $ 372,749     $ ( 40,309 )   $ 260,400     $ ( 62,567 )   $ 633,150   Debt Securities held to maturity                                                 U.S. Treasury Securities   $ ( 12,662 )   $ 295,383     $ ( 23,537 )   $ 175,570     $ ( 36,197 )   $ 470,953   Mortgage-backed securities     ( 31,367 )     278,746       ( 29,592 )     174,842       ( 60,960 )     453,588   State and municipal securities     ( 544 )     4,443       ( 474 )     2,330       ( 1,018 )     6,773   Total   $ ( 44,573 )   $ 578,572     $ ( 53,603 )   $ 352,742     $ ( 98,175 )   $ 931,314   December 31, 2021                                                 Debt Securities available for sale                                                 Mortgage-backed securities   $ ( 2,685 )   $ 303,297     $ -     $ -     $ ( 2,685 )   $ 303,297   State and municipal securities     ( 61 )     5,198       ( 9 )     228       ( 70 )     5,426   Corporate debt     ( 647 )     61,677       -       -       ( 647 )     61,677   Total   $ ( 3,393 )   $ 370,172     $ ( 9 )   $ 228     $ ( 3,402 )   $ 370,400   Debt Securities held to maturity                                                 U.S. Treasury Securities   $ ( 668 )   $ 123,698     $ -     $ -     $ ( 668 )   $ 123,698   Mortgage-backed securities     ( 1,271 )     134,192       -       -       ( 1,271 )     134,192   State and municipal securities     ( 10 )     482       -       -       ( 10 )     482   Total   $ ( 1,949 )   $ 258,372     $ -     $ -     $ ( 1,949 )   $ 258,372     79     At December 31, 2022 and 2021, no allowance for credit losses has been recognized on available for sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired. This is based on the Company’s analysis of the risk characteristics, including credit ratings, and other qualitative factors related to available for sale debt securities. The issuers of these debt securities continue to make timely principal and interest payments under the contractual terms of the securities. The Company does not intend to sell these debt securities and it is more likely than not that the Company will not be required to sell the debt securities before recovery of their amortized cost, which may be at maturity. The unrealized losses are due to increases in market interest rates over the yields available at the time the debt securities were purchased. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to U.S. Treasury and residential mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to securities issued by States and political subdivisions and other held-to-maturity securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, and (iv) internal forecasts. Historical loss rates associated with securities having similar grades as those in our portfolio have generally not been significant. Furthermore, as of December 31, 2022 and 2021, there were no past due principal or interest payments associated with these securities. Based upon (i) the issuer’s strong bond ratings and (ii) a zero historical loss rate, no allowance for credit losses has been recorded for held-to-maturity State and Municipal Securities as such amount is not material at December 31, 2022 and 2021. All debt securities in an unrealized loss position as of December 31, 2022 continue to perform as scheduled and the Company does not believe there is a possible credit loss or that an allowance for credit loss on these debt securities is necessary.   The following table summarizes information about sales and calls of debt securities.       Years Ended December 31,       2022     2021     2020       (In Thousands)   Sale and call proceeds   $ 75,036     $ 6,272     $ 27,857   Gross realized gains   $ -     $ 620     $ -   Gross realized losses     ( 6,168 )     -       -   Net realized (loss) gain   $ ( 6,168 )   $ 620     $ -     The carrying value of debt securities pledged to secure public funds on deposits and for other purposes as required by law as of December 31, 2022 and 2021 was $ 789.3 million and $ 481.3 million, respectively.   Restricted equity securities is comprised entirely of a restricted investment in Federal Home Loan Bank of Atlanta stock for membership requirement.     NOTE 3.           LOANS   The loan portfolio is classified based on the underlying collateral utilized to secure each loan for financial reporting purposes. This classification is consistent with the Quarterly Report of Condition and Income filed by ServisFirst Bank with the Federal Deposit Insurance Corporation (FDIC).   80     Commercial, financial and agricultural - Includes loans to business enterprises issued for commercial, industrial, agricultural production and/or other professional purposes. These loans are generally secured by equipment, inventory, and accounts receivable of the borrower and repayment is primarily dependent on business cash flows.   Real estate – construction – Includes loans secured by real estate to finance land development or the construction of industrial, commercial or residential buildings. Repayment is dependent upon the completion and eventual sale, refinance or operation of the related real estate project.   Owner-occupied commercial real estate mortgage – Includes loans secured by nonfarm nonresidential properties for which the primary source of repayment is the cash flow from the ongoing operations conducted by the party that owns the property.   1 - 4 family real estate mortgage – Includes loans secured by residential properties, including home equity lines of credit. Repayment is primarily dependent on the personal cash flow of the borrower.   Other real estate mortgage – Includes loans secured by nonowner-occupied properties, including office buildings, industrial buildings, warehouses, retail buildings, multifamily residential properties and farmland. Repayment is primarily dependent on income generated from the underlying collateral.   Consumer – Includes loans to individuals not secured by real estate. Repayment is dependent upon the personal cash flow of the borrower.   The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provided for Paycheck Protection Program (“PPP”) loans to be made by banks to employers with less than 500 employees if they continued to employ their existing workers. The American Rescue Plan Act of 2021, which was signed into law on March 21, 2021, provided additional relief for businesses, states, municipalities and individuals by, among other things, allocating additional funds for the PPP. Effective May 28, 2021, the PPP was closed to new applications. The Company funded approximately 7,400 loans for a total amount of $ 1.5 billion for clients under the PPP since April 2020. PPP loan origination fees recorded to interest income totaled $ 7.7 million and$27.3 million for the years ended December 31, 2022 and 2021, respectively. PPP loans outstanding totaled $ 2.0 million and $ 230.2 million at December 31, 2022 and 2021, respectively. PPP loans are included within the commercial, financial and agricultural loan category in the table below.   The composition of loans at December 31, 2022 and 2021 is summarized as follows:       December 31,       2022     2021                         (In Thousands)   Commercial, financial and agricultural   $ 3,145,317     $ 2,984,053   Real estate - construction     1,532,388       1,103,076   Real estate - mortgage:                 Owner-occupied commercial     2,199,280       1,874,103   1-4 family mortgage     1,146,831       826,765   Other mortgage     3,597,750       2,678,084   Total real estate - mortgage     6,943,861       5,378,952   Consumer     66,402       66,853   Total Loans     11,687,968       9,532,934   Less: Allowance for credit losses     ( 146,297 )     ( 116,660 ) Net Loans   $ 11,541,671     $ 9,416,274     Changes in the ACL during the years ended December 31, 2022, 2021 and 2020 are as follows:       Years Ended December 31,       2022     2021     2020                                 (In Thousands)   Balance, beginning of year   $ 116,660     $ 87,942     $ 76,584   Impact of adopting ASC 326     -       -       ( 2,000 ) Loans charged off     ( 10,137 )     ( 4,114 )     ( 29,568 ) Recoveries     2,167       1,315       492   Provision for credit losses     37,607       31,517       42,434   Balance, end of year   $ 146,297     $ 116,660     $ 87,942     81     As described in Note 1, “ Summary of Significant Accounting Policies, ” the Company adopted ASU 2016 - 13 on January 1, 2020, which introduced the CECL methodology for estimating all expected losses over the life of a financial asset. Under the current expected credit losses (“CECL”) methodology, the allowance for credit losses ("ACL") is measured on a collective basis for pools of loans with similar risk characteristics. For loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. For all loan segments collectively evaluated, losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable forecast period losses are reverted to long-term historical averages. The estimated loan losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses.       The Company uses the discounted cash flow (“DCF”) method to estimate ACL for all loan pools except for commercial and industrial ("C&I") revolving lines of credit and credit cards. For all loan pools utilizing the DCF method, the Company utilizes and forecasts national unemployment rate as a loss driver. The Company also utilizes and forecasts GDP growth as a second loss driver for its agricultural and consumer loan pools. Consistent forecasts of the loss drivers are used across the loan segments. At December 31, 2022 and 2021, the Company utilized a reasonable and supportable forecast period of twelve months followed by a six -month straight-line reversion to long-term averages. The Company leveraged economic projections from reputable and independent sources to inform its loss driver forecasts. At December 31, 2022, the Company expects the national unemployment rate to rise during the forecast period with a declining national GDP growth rate compared to December 31, 2021.   The Company uses a loss-rate method to estimate expected credit losses for its C&I revolving lines of credit and  and a remaining life methodology on credit card pools.  The C&I revolving lines of credit pool incorporates a probability of default (“PD”) and loss given default (“LGD”) modeling approach.  This approach involves estimating the pool average life and then using historical correlations of default and loss experience over time to calculate the lifetime PD and LGD.  These two inputs are then applied to the outstanding pool balance. The credit card pool incorporates a remaining life modeling approach, which utilizes an attrition-based method to estimate the remaining life of the pool.  A quarterly average loss rate is then calculated using the Company’s historical loss data. The model reduces the pool balance quarterly on a straight-line basis over the estimated life of the pool. The quarterly loss rate is multiplied by the outstanding balance at each period-end resulting in an estimated loss for each quarter. The sum of estimated loss for all quarters is the total calculated reserve for the pool.  Management has applied the loss-rate method to C&I lines of credit and to credit cards due to their generally short-term nature.  An expected loss ratio is applied based on internal and peer historical losses.   Each loan pool is adjusted for qualitative factors not inherently considered in the quantitative analyses. The qualitative adjustments either increase or decrease the quantitative model estimation. The Company considers factors that are relevant within the qualitative framework which include the following: lending policy, changes in nature and volume of loans, staff experience, changes in volume and trends of problem loans, concentration risk, trends in underlying collateral values, external factors, quality of loan review system and other economic conditions.   Inherent risks in the loan portfolio will differ based on type of loan. Specific risk characteristics by loan portfolio segment are listed below:   Commercial and industrial loans include risks associated with borrower’s cash flow, debt service coverage and management’s expertise. These loans are subject to the risk that the Company may have difficulty converting collateral to a liquid asset if necessary, as well as risks associated with degree of specialization, mobility and general collectability in a default situation. These commercial loans may be subject to many different types of risks, including fraud, bankruptcy, economic downturn, deteriorated or non-existent collateral, and changes in interest rates.   Real estate construction loans include risks associated with the borrower’s credit-worthiness, contractor’s qualifications, borrower and contractor performance, and the overall risk and complexity of the proposed project. Construction lending is also subject to risks associated with sub-market dynamics, including population, employment trends and household income. During times of economic stress, this type of loan has typically had a greater degree of risk than other loan types.   Real estate mortgage loans consist of loans secured by commercial and residential real estate. Commercial real estate lending is dependent upon successful management, marketing and expense supervision necessary to maintain the property. Repayment of these loans may be adversely affected by conditions in the real estate market or the general economy. Also, commercial real estate loans typically involve relatively large loan balances to a single borrower. Residential real estate lending risks are generally less significant than those of other loans. Real estate lending risks include fluctuations in the value of real estate, bankruptcies, economic downturn and customer financial problems.   82     Consumer loans carry a moderate degree of risk compared to other loans. They are generally more risky than traditional residential real estate loans but less risky than commercial loans. Risk of default is usually determined by the well-being of the local economies. During times of economic stress, there is usually some level of job loss both nationally and locally, which directly affects the ability of the consumer to repay debt.   Changes in the allowance for credit losses, segregated by loan type, during the years ended December 31, 2022 and 2021, respectively, are as follows:       Commercial,                                       financial and     Real estate -     Real estate -                       agricultural     construction     mortgage     Consumer     Total                                                 (In Thousands)       Twelve Months Ended December 31, 2022   Allowance for credit losses:                                         Balance at December 31, 2021   $ 41,869     $ 26,994     $ 45,829     $ 1,968     $ 116,660   Charge-offs     ( 9,256 )     -       ( 221 )     ( 660 )     ( 10,137 ) Recoveries     2,012       -       -       155       2,167   Provision     8,205       15,895       13,044       463       37,607   Balance at December 31, 2022   $ 42,830     $ 42,889     $ 58,652     $ 1,926     $ 146,297                                                 Twelve Months Ended December 31, 2021   Allowance for credit losses:                                         Balance at December 31, 2020   $ 36,370     $ 16,057     $ 33,722     $ 1,793     $ 87,942   Charge-offs     ( 3,453 )     ( 14 )     ( 279 )     ( 368 )     ( 4,114 ) Recoveries     1,135       52       85       43       1,315   Provision     7,817       10,899       12,301       500       31,517   Balance at December 31, 2021   $ 41,869     $ 26,994     $ 45,829     $ 1,968     $ 116,660     We maintain an ACL for credit losses on unfunded commercial lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to take into account the probability of a drawdown on the commitment.  The ACL on unfunded loan commitments is classified as a liability account on the Consolidated Balance Sheets within other liabilities, while the corresponding provision for these credit losses is recorded as a component of other expense.  The allowance for credit losses on unfunded commitments was $ 575,000 and $ 1.3 million at December 31, 2022 and 2021, respectively.  The provision expense for unfunded commitments was reduced by $ 1.4 million for the year ended December 31, 2022 and was reduced by $ 1.7  million for the year ended December 31, 2021.   The credit quality of the loan portfolio is summarized no less frequently than quarterly using categories similar to the standard asset classification system used by the federal banking agencies. The following table presents credit quality indicators for the loan loss portfolio segments and classes. These categories are utilized to develop the associated allowance for credit losses using historical losses adjusted for current economic conditions defined as follows:     ● Pass – loans which are well protected by the current net worth and paying capacity of the obligor (or obligors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral.   ● Special Mention – loans with potential weakness that may, if not reversed or corrected, weaken the credit or inadequately protect the Company’s position at some future date. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification.   ● Substandard – loans that exhibit well-defined weakness or weaknesses that presently jeopardize debt repayment. These loans are characterized by the distinct possibility that the institution will sustain some loss if the weaknesses are not corrected.   ● Doubtful – loans that have all the weaknesses inherent in loans classified substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.   83     The tables below presents loan balances classified by credit quality indicator, loan type and based on year of origination as of December 31, 2022 and 2021:   December 31, 2022   2022     2021     2020     2019     2018     Prior     Revolving Loans     Total       (In Thousands)   Commercial, financial and agricultural                                                                 Pass   $ 691,817     $ 502,648     $ 223,096     $ 144,587     $ 78,477     $ 134,893     $ 1,267,333     $ 3,042,851   Special Mention     6,906       3,737       1,101       1,748       570       898       29,516       44,476   Substandard     200       -       379       9,501       16,329       16,595       14,986       57,990   Doubtful     -       -       -       -       -       -       -       -   Total Commercial, financial and agricultural   $ 698,923     $ 506,385     $ 224,576     $ 155,836     $ 95,376     $ 152,386     $ 1,311,835     $ 3,145,317                                                                     Real estate - construction                                                                 Pass   $ 618,578     $ 638,126     $ 156,834     $ 15,197     $ 12,063     $ 14,847     $ 72,172     $ 1,527,817   Special Mention     2,500       -       -       -       -       873       -       3,373   Substandard     -       -       -       -       1,198       -       -       1,198   Doubtful     -       -       -       -       -       -       -       -   Total Real estate - construction   $ 621,078     $ 638,126     $ 156,834     $ 15,197     $ 13,261     $ 15,720     $ 72,172     $ 1,532,388                                                                     Owner-occupied commercial                                                                 Pass   $ 424,321     $ 496,298     $ 352,375     $ 199,987     $ 157,204     $ 477,926     $ 64,152     $ 2,172,263   Special Mention     2,362       -       -       2,723       4,682       6,917       1,687       18,371   Substandard     -       -       -       73       -       8,573       -       8,646   Doubtful     -       -       -       -       -       -       -       -   Total Owner-occupied commercial   $ 426,683     $ 496,298     $ 352,375     $ 202,783     $ 161,886     $ 493,416     $ 65,839     $ 2,199,280                                                                     1-4 family mortgage                                                                 Pass   $ 388,778     $ 273,515     $ 93,272     $ 52,209     $ 28,999     $ 57,512     $ 243,302     $ 1,137,587   Special Mention     315       445       816       375       294       881       2,854       5,980   Substandard     -       279       404       648       346       1,224       363       3,264   Doubtful     -       -       -       -       -       -       -       -   Total 1-4 family mortgage   $ 389,093     $ 274,239     $ 94,492     $ 53,232     $ 29,639     $ 59,617     $ 246,519     $ 1,146,831                                                                     Other mortgage                                                                 Pass   $ 1,027,747     $ 976,208     $ 517,392     $ 380,104     $ 130,228     $ 470,699     $ 75,669     $ 3,578,047   Special Mention     231       -       -       -       -       7,161       -       7,392   Substandard     -       -       -       130       4,569       7,612       -       12,311   Doubtful     -       -       -       -       -       -       -       -   Total Other mortgage   $ 1,027,978     $ 976,208     $ 517,392     $ 380,234     $ 134,797     $ 485,472     $ 75,669     $ 3,597,750                                                                     Consumer                                                                 Pass   $ 21,132     $ 5,845     $ 4,203     $ 1,759     $ 440     $ 2,988     $ 30,021     $ 66,388   Special Mention     -       -       -       -       -       14       -       14   Substandard     -       -       -       -       -       -       -       -   Doubtful     -       -       -       -       -       -       -       -   Total Consumer   $ 21,132     $ 5,845     $ 4,203     $ 1,759     $ 440     $ 3,002     $ 30,021     $ 66,402                                                                     Total Loans                                                                 Pass   $ 3,172,373     $ 2,892,640     $ 1,347,172     $ 793,843     $ 407,411     $ 1,158,865     $ 1,752,649     $ 11,524,953   Special Mention     12,314       4,182       1,917       4,846       5,546       16,744       34,057       79,606   Substandard     200       279       783       10,352       22,442       34,004       15,349       83,409   Doubtful     -       -       -       -       -       -       -       -   Total Loans   $ 3,184,887     $ 2,897,101     $ 1,349,872     $ 809,041     $ 435,399     $ 1,209,613     $ 1,802,055     $ 11,687,968     84     December 31, 2021   2021     2020     2019     2018     2017     Prior     Revolving Loans     Total       (In Thousands)   Commercial, financial and agricultural                                                                 Pass   $ 800,822     $ 294,841     $ 209,086     $ 130,579     $ 114,870     $ 127,572     $ 1,216,153     $ 2,893,923   Special Mention     1,245       1,323       942       846       915       784       19,801       25,856   Substandard     -       387       10,039       1,741       1,501       7,966       42,640       64,274   Doubtful     -       -       -       -       -       -       -       -   Total Commercial, financial     -       -       -       -       -       -       -       -   and agricultural   $ 802,067     $ 296,551     $ 220,067     $ 133,166     $ 117,286     $ 136,322     $ 1,278,594     $ 2,984,053                                                                     Real estate - construction                                                                 Pass   $ 597,497     $ 260,723     $ 110,671     $ 16,452     $ 13,704     $ 17,356     $ 76,662     $ 1,093,065   Special Mention     -       -       6,594       2,500       -       917       -       10,011   Substandard     -       -       -       -       -       -       -       -   Doubtful     -       -       -       -       -       -       -       -   Total Real estate - construction   $ 597,497     $ 260,723     $ 117,265     $ 18,952     $ 13,704     $ 18,273     $ 76,662     $ 1,103,076                                                                     Owner-occupied commercial                                                                 Pass   $ 406,473     $ 352,642     $ 231,197     $ 182,812     $ 162,648     $ 430,638     $ 96,860     $ 1,863,270   Special Mention     101       -       2,417       779       476       2,688       -       6,461   Substandard     -       -       -       -       -       4,372       -       4,372   Doubtful     -       -       -       -       -       -       -       -   Total Owner-occupied commercial   $ 406,574     $ 352,642     $ 233,614     $ 183,591     $ 163,124     $ 437,698     $ 96,860     $ 1,874,103                                                                     1-4 family mortgage                                                                 Pass   $ 299,686     $ 117,579     $ 68,044     $ 46,954     $ 37,374     $ 37,970     $ 210,338     $ 817,945   Special Mention     -       1,000       517       116       260       912       3,033       5,838   Substandard     -       150       593       241       231       611       1,156       2,982   Doubtful     -       -       -       -       -       -       -       -   Total 1-4 family mortgage   $ 299,686     $ 118,729     $ 69,154     $ 47,311     $ 37,865     $ 39,493     $ 214,527     $ 826,765                                                                     Other mortgage                                                                 Pass   $ 882,849     $ 481,012     $ 411,426     $ 174,700     $ 272,555     $ 353,621     $ 81,202     $ 2,657,365   Special Mention     -       -       130       376       2,720       4,656       -       7,882   Substandard     -       -       -       4,497       8,340       -       -       12,837   Doubtful     -       -       -       -       -       -       -       -   Total Other mortgage   $ 882,849     $ 481,012     $ 411,556     $ 179,573     $ 283,615     $ 358,277     $ 81,202     $ 2,678,084                                                                     Consumer                                                                 Pass   $ 16,303     $ 4,845     $ 2,896     $ 983     $ 903     $ 3,649     $ 37,250     $ 66,829   Special Mention     -       -       -       -       -       24       -       24   Substandard     -       -       -       -       -       -       -       -   Doubtful     -       -       -       -       -       -       -       -   Total Consumer   $ 16,303     $ 4,845     $ 2,896     $ 983     $ 903     $ 3,673     $ 37,250     $ 66,853                                                                     Total Loans                                                                 Pass   $ 3,003,630     $ 1,511,642     $ 1,033,320     $ 552,480     $ 602,054     $ 970,806     $ 1,718,465     $ 9,392,397   Special Mention     1,346       2,323       10,600       4,617       4,371       9,981       22,834       56,072   Substandard     -       537       10,632       6,479       10,072       12,949       43,796       84,465   Doubtful     -       -       -       -       -       -       -       -   Total Loans   $ 3,004,976     $ 1,514,502     $ 1,054,552     $ 563,576     $ 616,497     $ 993,736     $ 1,785,095     $ 9,532,934     Nonperforming loans include nonaccrual loans and loans 90 or more days past due and still accruing. Loans by performance status as of December 31, 2022 and 2021 are as follows:   December 31, 2022   Performing     Nonperforming     Total       (In Thousands)   Commercial, financial and agricultural   $ 3,138,014     $ 7,303     $ 3,145,317   Real estate - construction     1,532,388       -       1,532,388   Real estate - mortgage:                         Owner-occupied commercial     2,195,968       3,312       2,199,280   1-4 family mortgage     1,144,713       2,118       1,146,831   Other mortgage     3,592,732       5,018       3,597,750   Total real estate - mortgage     6,933,413       10,448       6,943,861   Consumer     66,312       90       66,402   Total   $ 11,670,127     $ 17,841     $ 11,687,968     December 31, 2021   Performing     Nonperforming     Total       (In Thousands)   Commercial, financial and agricultural   $ 2,979,671     $ 4,382     $ 2,984,053   Real estate - construction     1,103,076       -       1,103,076   Real estate - mortgage:                         Owner-occupied commercial     1,873,082       1,021       1,874,103   1-4 family mortgage     824,756       2,009       826,765   Other mortgage     2,673,428       4,656       2,678,084   Total real estate - mortgage     5,371,266       7,686       5,378,952   Consumer     66,824       29       66,853   Total   $ 9,520,837     $ 12,097     $ 9,532,934     85     Loans by past due status as of December 31, 2022 and 2021 are as follows:   December 31, 2022   Past Due Status (Accruing Loans)                                                               Total Past     Total                     Nonaccrual       30-59 Days     60-89 Days     90+ Days     Due     Nonaccrual     Current     Total Loans     With No ACL                                                                         (In Thousands)                                                                     Commercial, financial and agricultural   $ 1,075     $ 409     $ 195     $ 1,679     $ 7,108     $ 3,136,530     $ 3,145,317     $ 3,238   Real estate - construction     -       711       -       711       -       1,531,677       1,532,388       -   Real estate - mortgage:                                                                 Owner-occupied commercial     83       452       -       535       3,312       2,195,433       2,199,280       57   1-4 family mortgage     405       580       594       1,579       1,524       1,143,728       1,146,831       491   Other mortgage     231       -       4,512       4,743       506       3,592,501       3,597,750       -   Total real estate - mortgage     719       1,032       5,106       6,857       5,342       6,931,662       6,943,861       548   Consumer     174       128       90       392       -       66,010       66,402       621   Total   $ 1,968     $ 2,280     $ 5,391     $ 9,639     $ 12,450     $ 11,665,879     $ 11,687,968     $ 4,407     December 31, 2021   Past Due Status (Accruing Loans)                                                               Total Past     Total                     Nonaccrual       30-59 Days     60-89 Days     90+ Days     Due     Nonaccrual     Current     Total Loans     With No ACL                                                                         (In Thousands)           Commercial, financial and agricultural   $ 516     $ 77     $ 39     $ 632     $ 4,343     $ 2,979,078       2,984,053     $ 2,059   Real estate - construction     -       -       -       -       -       1,103,076       1,103,076       -   Real estate - mortgage:                                                                 Owner-occupied commercial     143       -       -       143       1,021       1,872,939       1,874,103       1,021   1-4 family mortgage     -       703       611       1,314       1,398       824,053       826,765       483   Other mortgage     -       -       4,656       4,656       -       2,673,428       2,678,084       -   Total real estate - mortgage     143       703       5,267       6,113       2,419       5,370,420       5,378,952       1,504   Consumer     93       23       29       145       -       66,708       66,853       -   Total   $ 752     $ 803     $ 5,335     $ 6,890     $ 6,762     $ 9,519,282       9,532,934     $ 3,563     There was no interest earned on nonaccrual loans for the years ended December 31, 2022 and 2021.   Loans that  no  longer share similar risk characteristics with the collectively evaluated pools are estimated on an individual basis. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table summarizes collateral-dependent gross loans held for investment by collateral type as follows:               Accounts                             ACL   December 31, 2022   Real Estate     Receivable     Equipment     Other     Total     Allocation       (In Thousands)   Commercial, financial and agricultural   $ 20,061     $ 12,092     $ 837     $ 24,998     $ 57,988     $ 9,910   Real estate - construction     -       -       -       1,198       1,198       7   Real estate - mortgage:                                                 Owner-occupied commercial     8,573       -       -       74       8,647       154   1-4 family mortgage     3,260       -       -       -       3,260       316   Other mortgage     12,311       -       -       -       12,311       -   Total real estate - mortgage     24,144       -       -       74       24,218       470   Total   $ 44,205     $ 12,092     $ 837     $ 26,270     $ 83,404     $ 10,387     86                 Accounts                             ACL   December 31, 2021   Real Estate     Receivable     Equipment     Other     Total     Allocation       (In Thousands)   Commercial, financial and agricultural   $ 13,067     $ 5,075     $ 18,533     $ 27,599     $ 64,274     $ 9,727   Real estate - mortgage:                                                 Owner-occupied commercial     4,372       -       -       -       4,372       1,371   1-4 family mortgage     2,982       -       -       -       2,982       163   Other mortgage     12,837       -       -       -       12,837       31   Total real estate - mortgage     20,191       -       -       -       20,191       1,565   Total   $ 33,258     $ 5,075     $ 18,533     $ 27,599     $ 84,465     $ 11,292     On March 22, 2020, an Interagency Statement was issued by banking regulators that encouraged financial institutions to work prudently with borrowers who were or may have been unable to meet their contractual payment obligations due to the effects of COVID- 19. Additionally, Section 4013 of the CARES Act further provided that a qualified loan modification was exempt by law from classification as a Troubled Debt Restructurings (“TDR”) as defined by GAAP, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that was 60 days after the date on which the national emergency concerning the COVID- 19 outbreak declared by the President of the United States under the National Emergencies Act terminates. The Interagency Statement was subsequently revised in April 2020 to clarify the interaction of the original guidance with Section 4013 of the CARES Act, as well as setting forth the banking regulators’ views on consumer protection considerations. On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act 2021, which extended the period established by Section 4013 of the CARES Act to the earlier of January 1, 2022 or the date that wa 60 days after the date on which the national COVID- 19 emergency terminates. In accordance with such guidance, the Bank offered short-term modifications made in response to COVID- 19 to borrowers who were current and otherwise not past due. These included short-term ( 180 days or less) modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that were insignificant. As of December 31, 2021, there were 12 loans outstanding totaling $ 1.5 million that had payment deferrals in connection with the COVID- 19 relief provided by the CARES Act. At December 31, 2022, there were no loans with payment deferrals in connection with COVID- 19 relief.   TDRs at December 31, 2022 and 2021 totaled $ 2.5 million and $ 2.6 million, respectively. The following tables present loans modified in a TDR during the periods presented by portfolio segment and the financial impact of those modifications. The tables include modifications made to new TDRs, as well as renewals of existing TDRs.       Year Ended December 31, 2022               Pre-     Post-               Modification     Modification               Outstanding     Outstanding       Number of     Recorded     Recorded       Contracts     Investment     Investment                                 (In Thousands)   Troubled Debt Restructurings                         Commercial, financial and agricultural     3     $ 444     $ 444   Real estate - construction     -       -       -   Real estate - mortgage:                         Owner-occupied commercial     -       -       -   1-4 family mortgage     -       -       -   Other mortgage     -       -       -   Total real estate - mortgage     -       -       -   Consumer     -       -       -         3     $ 444     $ 444     87         Year ended December 31, 2021               Pre-     Post-               Modification     Modification               Outstanding     Outstanding       Number of     Recorded     Recorded       Contracts     Investment     Investment       (In Thousands)   Troubled Debt Restructurings                         Commercial, financial and agricultural     2     $ 1,155     $ 1,155   Real estate - construction     -       -       -   Real estate - mortgage:                         Owner-occupied commercial     1       991       991   1-4 family mortgage     -       -       -   Other mortgage     -       -       -   Total real estate - mortgage     1       991       991   Consumer     -       -       -         3     $ 2,146     $ 2,146     There were no loans which were modified in the previous twelve months (i.e., the twelve months prior to default) that defaulted during the years ended December 31, 2022 and December 31, 2021, respectively. For purposes of this disclosure, default is defined as 90 days past due and still accruing or placement on nonaccrual status.   In the ordinary course of business, the Company has granted loans to certain related parties, including directors, and their affiliates. The interest rates on these loans were substantially the same as rates prevailing at the time of the transaction and repayment terms are customary for the type of loan. Changes in related party loans for the years ended December 31, 2022 and 2021 are as follows:       Years Ended December 31,       2022     2021       (In Thousands)   Balance, beginning of year   $ 51,180     $ 36,969   Additions     -       3,168   Advances     103,513       90,553   Repayments     ( 102,085 )     ( 79,445 ) Removal     -       ( 65 ) Balance, end of year   $ 52,608     $ 51,180       NOTE 4.           FORECLOSED PROPERTIES   Other real estate and certain other assets acquired in foreclosure are carried at the lower of the recorded investment in the loan or fair value less estimated costs to sell the property.   An analysis of foreclosed properties for the years ended December 31, 2022, 2021 and 2020 follows:       2022     2021     2020       (In Thousands)   Balance at beginning of year   $ 1,208     $ 6,497     $ 8,178   Transfers from loans and capitalized expenses     1,045       2,318       2,985   Foreclosed properties sold     ( 2,281 )     ( 6,474 )     ( 2,813 ) Write downs and partial liquidations     276       ( 1,133 )     ( 1,853 ) Balance at end of year   $ 248     $ 1,208     $ 6,497     88       NOTE 5.           PREMISES AND EQUIPMENT   Premises and equipment are summarized as follows:       December 31,       2022     2021       (In Thousands)   Land   $ 5,809     $ 5,830   Building     38,319       38,261   Furniture and equipment     32,454       31,183   Leasehold improvements     13,773       13,400   Construction in progress     1,933       62   Total premises and equipment, cost     92,288       88,736   Accumulated depreciation     ( 32,438 )     ( 28,436 ) Total premises and equipment, net   $ 59,850     $ 60,300     The provisions for depreciation charged to occupancy and equipment expense for the years ended December 31, 2022, 2021 and 2020 were $ 4.1 million, $4.1million, and $ 3.8 million, respectively.     NOTE 6.           LEASES   The Company leases space under non-cancelable operating leases for several of its banking offices and certain office equipment. The Company reports its right-of-use asset in other assets and its lease liabilities in other liabilities in its Consolidated Balance Sheet.   Supplemental balance sheet information related to operating leases is as follows:       December 31, 2022     December 31, 2021   Right-of-use assets   $ 18,816     $ 17,916   Lease liabilities   $ 19,614     $ 18,549   Weighted average remaining lease term     6.6       6.8   Weighted average discount rate     2.81 %     2.46 %   Lease costs during the years ended December 31, 2022 and 2021 were as follows (in thousands):       2022     2021   Operating lease cost   $ 4,379     $ 4,009   Short-term lease cost     68       -   Variable lease cost     610       430   Sublease income     ( 40 )     ( 94 ) Net lease cost   $ 5,017     $ 4,345     The following table reconciles future undiscounted lease payments due under non-cancelable leases to the aggregate lease liability as of December 31, 2022:       (In Thousands)   2023   $ 4,281   2024     3,360   2025     3,249   2026     2,626   2027     2,132   Thereafter     6,042   Total lease payments   $ 21,690   Less: imputed interest     ( 2,076 ) Present value of operating lease liabilities   $ 19,614     89       NOTE 7.           VARIABLE INTEREST ENTITIES (VIEs)   The Company utilizes special purpose entities (SPEs) that constitute investments in limited partnerships that undertake certain development projects to achieve federal and state tax credits. These SPEs are typically structured as VIEs and are thus subject to consolidation by the reporting enterprise that absorbs the majority of the economic risks and rewards of the VIE. To determine whether it must consolidate a VIE, the Company analyzes the design of the VIE to identify the sources of variability within the VIE, including an assessment of the nature of risks created by the assets and other contractual obligations of the VIE, and determines whether it will absorb a majority of that variability and has the power to direct the activities that most significantly impact the economic performance of the entity.   The Company has invested in limited partnerships as a funding investor.  The partnerships are single purpose entities that lend money to real estate investors for the purpose of acquiring and operating, or rehabbing, commercial property.  The investments qualify for New Market Tax Credits under Internal Revenue Code Section 45D, as amended, or Historic Rehabilitation Tax Credits under Code Section 47, as amended, or Low-Income Housing Tax Credits under Code Section 42, as amended.  For each of the partnerships, the Company acts strictly in a limited partner capacity.  The Company has determined that it is not the primary beneficiary of these partnerships because it does not have the power to direct the activities of the entity that most significantly impact the entities’ economic performance and therefore the partnerships are not consolidated in our financial statements.  The amount of recorded investment in these partnerships as of December 31, 2022 and 2021 was $ 46.3 million and $ 69.9 million, respectively.  During 2022, the Company invested in one Federal Historic Tax Credit partnership and two Low-Income Housing Tax Credit partnerships with recorded investment in each totaling $1.2 million and $ 7.6 million, respectively, at December 31, 2022.  There was no recorded investment included in loans of the Company at December 31, 2022.  There amount of loans included in the Company’s recorded investment at December 31, 2021 was $ 32.0 million.  The remaining amounts are included in other assets.     NOTE 8.           DEPOSITS   Deposits at December 31, 2022 and 2021 were as follows:       December 31,       2022     2021       (In Thousands)   Noninterest-bearing demand   $ 3,321,347     $ 4,799,767   Interest-bearing checking     7,224,201       6,707,778   Savings     138,450       131,955   Time deposits, $250,000 and under     239,772       256,185   Time deposits, over $250,000     573,035       507,151   Brokered time deposits     50,000       50,000       $ 11,546,805     $ 12,452,836     The scheduled maturities of time deposits at December 31, 2022 were as follows:       (In Thousands)   2023   $ 647,382   2024     132,892   2025     44,019   2026     22,573   2027     15,941   Total   $ 862,807     At December 31, 2022 and 2021, overdraft deposits reclassified to loans were $ 1.9 million and $ 4.0 million, respectively.     NOTE 9.           FEDERAL FUNDS PURCHASED   At December 31, 2022, the Company had $ 1.36 billion (excludes the Company’s federal funds purchases reported in the next paragraph) in federal funds purchased from its correspondent banks that are clients of its correspondent banking unit, compared to $ 1.71 billion at December 31, 2021. Rates paid on these funds were between 4.40 % and 4.50 % as of December 31, 2022 and 0.15 % and 0.25 % as of December 31, 2021.   90     At December 31, 2022, the Company had available lines of credit totaling approximately $ 963.0 million with various financial institutions for borrowing on a short-term basis, compared to $ 986.0 million at December 31, 2021. At December 31, 2022, the Company had $ 265.0 million outstanding borrowings from these lines, compared to no  outstanding borrowings from these lines at December 31, 2021.     NOTE 10.           OTHER BORROWINGS   Other borrowings are comprised of:     ● $ 30.0 million on the Company’s 4.5 % Subordinated Notes due November 8, 2027, which were issued in a private placement in November 2017 and pay interest semi-annually. The Notes may be prepaid by the Company.   ● $ 34.75 million of the Company’s 4 % Subordinated Notes due October 21, 2030, which were issued in a private placement in October 2020 and pay interest semi-annually. The Notes may not be prepaid by the Company prior to October 21, 2025.   Debt is reported net of unamortized issuance costs of $ 24,000 and $ 44,000 as of December 31, 2022 and 2021, respectively.     NOTE 11.           SF INTERMEDIATE HOLDING COMPANY, INC., SF HOLDING 1, INC., SF TN REALTY HOLDINGS, INC., SF REALTY 1, INC., SF FLA REALTY, INC., SF GA REALTY, INC. AND SF TN REALTY, INC.                      In January 2012, the Company formed SF Holding 1, Inc., an Alabama corporation, and its subsidiary, SF Realty 1, Inc., an Alabama corporation.  In September 2013, the Company formed SF FLA Realty, Inc., an Alabama corporation and a subsidiary of SF Holding 1, Inc.  In May 2014, the Company formed SF GA Realty, Inc., an Alabama corporation and a subsidiary of SF Holding 1, Inc.  In February 2016, the Company formed SF TN Realty, Inc., an Alabama corporation and a subsidiary of SF Holding 1, Inc.  Also in February 2016, the Company formed SF Intermediate Holding Company, Inc., an Alabama corporation.  Immediately following the formation of SF Intermediate Holding Company, Inc., ServisFirst Bank assigned all of the outstanding capital stock of SF Holding 1, Inc. to SF Intermediate Holding Company, Inc., such that SF Holding 1, Inc. became a wholly-owned first tier subsidiary of SF Intermediate Holding Company, Inc. In November 2022, SF Intermediate Holding Company, Inc. formed SF TN Realty Holdings, Inc., a Delaware corporation. In December 2022, SF Holding 1, Inc. merged with and into SF TN Realty Holdings, Inc. with SF TN Realty Holdings, Inc. being the surviving entity. Following the merger, SF Realty 1, SF FLA Realty, SF GA Realty and SF TN Realty are all subsidiaries of SF TN Realty Holdings, Inc.  SF Realty 1, SF FLA Realty, SF GA Realty and SF TN Realty all hold and manage participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank and have elected to be treated as real estate investment trusts (“REIT”) for U.S. income tax purposes.  SF Intermediate Holding Company, Inc., SF TN Realty Holdings, Inc., SF Realty 1, Inc., SF FLA Realty, Inc., SF GA Realty, Inc. and SF TN Realty, Inc. are all consolidated into the Company.     NOTE 12.           DERIVATIVES   The Company periodically enters into derivative contracts to manage exposures to movements in interest rates. The Company purchased an interest rate cap in  May  2020  to limit exposures to increases in interest rates. The interest rate cap is  not  designated as a hedging instrument but rather is a stand-alone derivative. The interest rate cap has an original term of  3  years, a notional amount of $ 300  million and is tied to the  one -month LIBOR rate with a strike rate of  0.50 %. The fair value of the interest rate cap is carried on the Consolidated Balance Sheets in other assets and the change in fair value is recognized in noninterest income each quarter. At  December 31, 2022,  the interest rate cap had a fair value of $ 4.2 million and remaining term of  0.3  years, compared to a fair value of $ 1.15 million and remaining term of 1.4 years at December 31, 2021.   The Company has entered into forward loan sale commitments with secondary market investors to deliver loans on a “best efforts delivery” basis, which do not meet the definition of a derivative instrument. When a rate is committed to a borrower, it is based on the best price that day and locked with the investor for the customer for a 30 -day period. In the event the loan is not delivered to the investor, the Company has no risk or exposure with the investor. The interest rate lock commitments related to loans that are originated for later sale are classified as derivatives. The fair values of the Company’s agreements with investors and rate lock commitments to customers as of December 31, 2022 and 2021 were not material.   91       NOTE 13.           EMPLOYEE AND DIRECTOR BENEFITS   The Company has a stock incentive plan, which is described below. The compensation cost that has been charged against income for the plan was approximately $ 3.2 million, $ 1.9 million and $ 1.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.   Stock Incentive Plan   On March 23, 2009, the Company’s board of directors adopted the 2009 Stock Incentive Plan (the “Plan”), which was effective upon approval by the stockholders at the 2009 Annual Meeting of Stockholders. The 2009 Plan originally permitted the grant of up to 2,550,000 shares of common stock. However, upon stockholder approval during 2014, the Plan was amended in order to allow the Company to grant stock options for up to 5,550,000 shares of common stock. The Plan authorizes the grant of stock appreciation rights, restricted stock, incentive stock options, non-qualified stock options, non-stock share equivalents, performance shares or performance units and other equity-based awards. Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant.   As of December 31, 2022, there are a total of 3,089,132 shares available to be granted under the Plan.   Stock-based compensation expense for stock-based awards is based on the grant-date fair value. For stock option awards, the fair value is estimated at the date of grant using the Black-Scholes-Merton valuation model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. The fair value of each option granted is estimated on the date of grant using the Black-Scholes-Merton model based on the weighted-average assumptions for expected dividend yield, expected stock price volatility, risk-free interest rate and expected life of options granted.   There were no grants of stock options during the years ended December 31, 2022 and 2021.   The following tables summarize stock option activity:       Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (years)     Aggregate Intrinsic Value                               (In Thousands)   Year Ended December 31, 2022:                                 Outstanding at beginning of year     353,250     $ 19.28       3.8     $ 23,525   Exercised     ( 70,500 )     17.96       2.2       3,592   Forfeited     ( 2,750 )     37.94       5.4       85   Outstanding at end of year     280,000     $ 19.43       3.0     $ 14,088                                     Exercisable at December 31, 2022:     220,500     $ 14.37       2.0     $ 12,279                                     Year Ended December 31, 2021:                                 Outstanding at beginning of year     641,450     $ 18.15       4.6     $ 16,985   Exercised     ( 278,200 )     12.58       2.8       20,131   Forfeited     ( 10,000 )     38.38       5.2       466   Outstanding at end of year     353,250     $ 19.28       3.8     $ 23,525                                     Exercisable at December 31, 2021:     264,000     $ 12.89       2.8     $ 19,353                                     Year Ended December 31, 2020:                                 Outstanding at beginning of year     965,750     $ 15.20       4.9     $ 21,914   Exercised     ( 306,300 )     11.38       2.9       8,854   Forfeited     ( 18,000 )     30.79       6.1       171   Outstanding at end of year     641,450     $ 18.15       4.6     $ 16,985                                     Exercisable at December 31, 2020:     182,200     $ 12.86       3.5     $ 4,998     92     Exercisable options at December 31, 2022 were as follows:   Range of Exercise Price     Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (years)     Aggregate Intrinsic Value                                   (In Thousands)   $ 5.00 - 6.00       40,000     $ 5.50       0.2     $ 2,536     6.00 - 7.00       41,500       6.92       1.4       2,573     15.00 - 16.00       59,000       15.45       2.0       3,154     17.00 - 18.00       21,500       17.17       2.3       1,112     18.00 - 19.00       6,000       18.49       2.7       556     19.00 - 20.00       36,000       19.16       3.1       1,791     25.00 - 26.00       4,000       25.41       3.7       174     38.00 - 39.00       12,500       38.24       4.1       383             220,500     $ 14.37       2.0     $ 12,279     As of December 31, 2022, there was $ 201,000 of total unrecognized compensation cost related to non-vested stock options. As of December 31, 2022, non-vested stock options had a weighted average remaining time to vest of 1.1 years.   Restricted Stock and Performance Shares   The Company periodically grants restricted stock awards that vest upon service conditions. Dividend payments are made during the vesting period. The value of restricted stock is determined to be the current value of the Company’s stock, and this total value will be recognized as compensation expense over the vesting period. As of December 31, 2022, there was $ 4.3 million of total unrecognized compensation cost related to non-vested restricted stock. As of December 31, 2022, non-vested restricted stock had a weighted average remaining time to vest of 1.9 years.   The Company periodically grants performance stock that give plan participants the opportunity to earn between  0 % and  150 % of the number of performance shares granted based on achieving certain performance metrics. The number of performance shares earned is determined by reference to the Company’s total shareholder return relative to a peer group of other publicly traded banks and bank holding companies during the performance period. The performance period is generally  three  years starting on the grant date. The fair value of performance stock is determined using a Monte Carlo simulation model on the grant date. As of December 31, 2022, there was $ 801,000 of total unrecognized compensation cost related to non-vested performance stock. As of December 31, 2022, non-vested performance stock had a weighted average remaining time to vest of 1.7 years.   The following table summarizes restricted stock and performance stock activity:       Restricted Stock     Performance Stock       Shares     Weighted Average Grant Date Fair Value     Shares     Weighted Average Grant Date Fair Value   Year Ended December 31, 2022:                                 Non-vested at beginning of year     126,975     $ 42.28       12,437     $ 37.05   Granted     53,974       83.24       11,415       72.81   Vested     ( 28,160 )     43.27       -       -   Forfeited     ( 11,209 )     58.82       -       -   Non-vested at end of year     141,580     $ 56.39       23,852     $ 54.16                                     Year Ended December 31, 2021:                                 Non-vested at beginning of year     84,307     $ 34.93       -     $ -   Granted     69,295       48.92       12,437       37.05   Vested     ( 14,274 )     29.33       -       -   Forfeited     ( 12,353 )     39.60       -       -   Non-vested at end of year     126,975     $ 42.28       12,437     $ 37.05                                     Year Ended December 31, 2020:                                 Non-vested at beginning of year     71,290     $ 32.24       -     $ -   Granted     33,695       33.91       -       -   Vested     ( 20,178 )     23.76       -       -   Forfeited     ( 500 )     34.09       -       -   Non-vested at end of year     84,307     $ 34.93       -     $ -     93     Retirement Plans   The Company has a retirement savings 401 (k) and profit-sharing plan in which all employees age 21 and older may participate after completion of one year of service. For employees in service with the Company at June 15, 2005, the length of service and age requirements were waived. The Company matches employees’ contributions based on a percentage of salary contributed by participants and may make additional discretionary profit-sharing contributions. The Company’s expense for the plan was $ 1.8 million, $ 1.6 million, and $ 2.0 million for 2022, 2021 and 2020, respectively.     NOTE 14.           REGULATORY MATTERS   The Bank is subject to dividend restrictions set forth in the Alabama Banking Code and by the Alabama State Banking Department. Under such restrictions, the Bank may not, without the prior approval of the Alabama State Banking Department, declare dividends in excess of the sum of the current year’s earnings plus the retained earnings from the prior two years. Based on these restrictions, the Bank would be limited to paying $ 449.8 million in dividends as of December 31, 2022.   The Bank is subject to various regulatory capital requirements administered by the state and federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank and the financial statements. Under regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification under the prompt corrective guidelines are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.   Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of common equity Tier 1 capital, total risk-based capital and Tier 1 capital to risk-weighted assets (as defined in the regulations), and Tier 1 capital to adjusted total assets (as defined). Management believes, as of December 31, 2022, that the Bank meets all capital adequacy requirements to which it is subject.   As of December 31, 2022, the most recent notification from the Federal Deposit Insurance Corporation categorized ServisFirst Bank as well capitalized under the regulatory framework for prompt corrective action. To remain categorized as well capitalized, the Bank will have to maintain minimum CET1, total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as disclosed in the table below. Management believes that it is well capitalized under the prompt corrective action provisions as of December 31, 2022.   The Company’s and Bank’s actual capital amounts and ratios are presented in the following table:       Actual     For Capital Adequacy Purposes     To Be Well Capitalized Under Prompt Corrective Action Provisions       Amount     Ratio     Amount     Ratio     Amount     Ratio   As of December 31, 2022:                                                 CET I Capital to Risk Weighted Assets:                                                 Consolidated   $ 1,326,035       9.55 %   $ 624,986       4.50 %     N/A       N/A   ServisFirst Bank     1,385,697       9.98 %     624,942       4.50 %   $ 902,694       6.50 % Tier I Capital to Risk Weighted Assets:                                                 Consolidated     1,326,535       9.55 %     833,315       6.00 %     N/A       N/A   ServisFirst Bank     1,386,197       9.98 %     833,256       6.00 %     1,111,008       8.00 % Total Capital to Risk Weighted Assets:                                                 Consolidated     1,532,134       11.03 %     1,111,086       8.00 %     N/A       N/A   ServisFirst Bank     1,533,069       11.04 %     1,111,008       8.00 %     1,388,760       10.00 % Tier I Capital to Average Assets:                                                 Consolidated     1,326,535       9.29 %     570,960       4.00 %     N/A       N/A   ServisFirst Bank     1,386,197       9.71 %     570,924       4.00 %     713,656       5.00 %                                                   As of December 31, 2021:                                                 CET I Capital to Risk Weighted Assets:                                                 Consolidated   $ 1,123,826       9.95 %   $ 508,065       4.50 %     N/A       N/A   ServisFirst Bank     1,185,161       10.50 %     508,007       4.50 %   $ 733,787       6.50 % Tier I Capital to Risk Weighted Assets:                                                 Consolidated     1,124,326       9.96 %     677,420       6.00 %     N/A       N/A   ServisFirst Bank     1,185,661       10.50 %     677,342       6.00 %     903,123       8.00 % Total Capital to Risk Weighted Assets:                                                 Consolidated     1,306,992       11.58 %     903,226       8.00 %     N/A       N/A   ServisFirst Bank     1,303,621       11.55 %     903,123       8.00 %     1,128,903       10.00 % Tier I Capital to Average Assets:                                                 Consolidated     1,124,326       7.39 %     608,880       4.00 %     N/A       N/A   ServisFirst Bank     1,185,661       7.79 %     608,826       4.00 %     761,033       5.00 %   94       NOTE 15.           OTHER OPERATING INCOME AND EXPENSES   The major components of other operating income and expense included in noninterest income and noninterest expense are as follows:       Years Ended December 31,       2022     2021     2020       (In Thousands)   Other Operating Income                         ATM fee income   $ 618     $ 1,443     $ 1,234   Mark to market interest rate cap derivative     6,960       1,013       ( 656 ) Gain (loss) on sale of ORE     501       ( 288 )     8   (Loss) gain on sale of fixed assets     ( 12 )     433       9   Death benefit of bank owned life insurance contracts     2,153       -       -   Merchant services fees     1,765       1,231       565   Other     676       832       455   Total other operating income   $ 12,661     $ 4,664     $ 1,615                             Other Operating Expenses                         Other loan expenses   $ 2,226     $ 2,744     $ 4,886   Customer and public relations     2,354       1,840       1,052   Sales and use tax     636       1,016       528   Write-down investment in tax credit partnerships     9,998       9,152       346   Telephone     568       453       541   Donations and contributions     749       544       506   Marketing     446       498       338   Supplies     612       504       495   Fraud and forgery losses     1,988       425       463   Directors fees     730       659       632   Postage     366       290       278   Other operational losses     2,777       197       1,677   Core processing deconverison expense     939       3,007       -   Other     6,686       5,828       3,748   Total other operating expenses   $ 31,075     $ 27,157     $ 15,490       NOTE 16.           INCOME TAXES   The components of income tax expense are as follows:       Year Ended December 31,       2022     2021     2020       (In Thousands)   Current tax expense:                         Federal   $ 56,318     $ 45,248     $ 50,016   State     3,621       5,428       4,350   Total current tax expense     59,939       50,676       54,366   Deferred tax (benefit) expense:                         Federal     ( 4,110 )     ( 5,596 )     ( 9,342 ) State     1,495       535       ( 385 ) Total deferred tax (benefit)     ( 2,615 )     ( 5,061 )     ( 9,727 ) Total income tax expense   $ 57,324     $ 45,615     $ 44,639     95     The Company’s total income tax expense differs from the amounts computed by applying the Federal income tax statutory rates to income before income taxes. A reconciliation of the differences is as follows:       Year Ended December 31, 2022       Amount     % of Pre-tax Earnings       (In Thousands)   Income tax at statutory federal rate   $ 64,796       21.00  % Effect on rate of:                 State income tax, net of federal tax effect     7,247       2.35  % Tax-exempt income, net of expenses     ( 188 )     ( 0.06 )% Bank-owned life insurance contracts     ( 1,812 )     ( 0.59 )% Excess tax benefit from stock compensation     ( 1,091 )     ( 0.35 )% Federal tax credits, net of related amortization     ( 11,131 )     ( 3.61 )% Other     ( 497 )     ( 0.16 )% Effective income tax and rate   $ 57,324       18.58  %       Year Ended December 31, 2021       Amount     % of Pre-tax Earnings       (In Thousands)   Income tax at statutory federal rate   $ 53,203       21.00  % Effect on rate of:                 State income tax, net of federal tax effect     4,952       1.95  % Tax-exempt income, net of expenses     ( 242 )     ( 0.10 )% Bank-owned life insurance contracts     ( 1,395 )     ( 0.55 )% Excess tax benefit from stock compensation     ( 2,335 )     ( 0.92 )% Federal tax credits, net of related amortization     ( 11,019 )     ( 4.35 )% Other     2,451       0.97  % Effective income tax and rate   $ 45,615       18.00  %       Year Ended December 31, 2020       Amount     % of Pre-tax Earnings       (In Thousands)   Income tax at statutory federal rate   $ 44,984       21.00  % Effect on rate of:                 State income tax, net of federal tax effect     3,230       1.51  % Tax-exempt income, net of expenses     ( 354 )     ( 0.17 )% Bank-owned life insurance contracts     ( 1,325 )     ( 0.62 )% Excess tax benefit from stock compensation     ( 1,306 )     ( 0.61 )% Federal tax credits     ( 563 )     ( 0.26 )% Other     ( 27 )     ( 0.01 )% Effective income tax and rate   $ 44,639       20.84  %   96     The components of net deferred tax asset are as follows:       December 31,       2022     2021       (In Thousands)   Deferred tax assets:                 Allowance for credit losses   $ 36,720     $ 29,237   Other real estate owned     316       520   Nonqualified equity awards     1,229       816   Nonaccrual interest     289       289   State tax credits     1,795       3,988   Deferred loan fees     4,720       5,087   Reserve for unfunded commitments     144       435   Accrued bonus     4,540       3,910   Capital loss carryforward     1,889       1,867   Lease liability     4,923       4,654   Deferred revenue     20       31   Net unrealized loss on securities available for sale     16,339       -   Other deferred tax assets     60       1,429   Total deferred tax assets     72,984       52,263                     Deferred tax liabilities:                 Net unrealized gain on securities available for sale     -       3,723   Depreciation     4,431       4,872   Prepaid expenses     975       607   Investments     1,054       696   Right-of-use assets and other leasing transactions     4,723       4,495   Acquired intangible assets     -       6   Other deferred tax liabilities     1,353       92   Total deferred tax liabilities     12,536       14,491   Net deferred tax assets   $ 60,448     $ 37,772     The Company believes its net deferred tax asset is recoverable as of December 31, 2022 and 2021 based on the expectation of future taxable income and other relevant considerations.   Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.   The Company and its subsidiaries file a consolidated U.S. Federal income tax return and various consolidated and separate company state income tax returns. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended December 31, 2019  through 2022. The Company is also currently open to audit by several state departments of revenue for the years ended December 31, 2019  through 2022. The audit periods differ depending on the date the Company began business activities in each state.   Accrued interest and penalties on unrecognized income tax benefits totaled $ 0 and $ 169,000 as of December 31, 2022 and 2021, respectively. Interest and penalties related to unrecognized income tax benefits are recorded in the provision for income taxes. Unrecognized income tax benefits as of December 31, 2022 and December 31, 2021, that, if recognized, would impact the effective income tax rate totaled $ 0 and $ 3,659,000 (net of the federal benefit on state income tax issues), respectively. The Company does not have any unrecognized tax benefits as of December 31, 2022.   The following table presents a summary of the changes during 2022, 2021 and 2020 in the amount of unrecognized tax benefits that are included in the consolidated balance sheets.       2022     2021     2020       (In Thousands)   Balance, beginning of year   $ 3,659     $ 3,238     $ 2,683   Increases related to prior year tax positions     -       864       997   Decreases related to prior year tax positions     ( 2,860 )     -       -   Increases related to current year tax positions     -       -       -   Settlements     -       -       -   Lapse of statute     ( 799 )     ( 443 )     ( 442 ) Balance, end of year   $ -     $ 3,659     $ 3,238     97       NOTE 17.           COMMITMENTS AND CONTINGENCIES   Loan Commitments   The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, credit card arrangements, and standby letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. A summary of the Company’s approximate commitments and contingent liabilities is as follows:       2022     2021     2020       (In Thousands)   Commitments to extend credit   $ 4,230,485     $ 3,515,818     $ 2,606,258   Credit card arrangements     368,749       366,525       286,128   Standby letters of credit and financial guarantees     67,285       61,856       66,208   Total   $ 4,666,519     $ 3,944,199     $ 2,958,594     Commitments to extend credit, credit card arrangements, commercial letters of credit and standby letters of credit all include exposure to some credit loss in the event of nonperformance of the customer. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet financial instruments. Because these instruments have fixed maturity dates, and because many of them expire without being drawn upon, they do not generally present any significant liquidity risk to the Company.     NOTE 18.           CONCENTRATIONS OF CREDIT   The Company originates primarily commercial, residential, and consumer loans to customers in the Company’s market area. The ability of the majority of the Company’s customers to honor their contractual loan obligations is dependent on the economy in the market area.   The Company’s loan portfolio is concentrated primarily in loans secured by real estate, principally secured by real estate in the Company’s primary market areas. In addition, a substantial portion of the other real estate owned is located in that same market. Accordingly, the ultimate collectability of the loan portfolio and the recovery of the carrying amount of other real estate owned are susceptible to changes in market conditions in the Company’s primary market area.     NOTE 19.           EARNINGS PER COMMON SHARE   Basic earnings per common share are computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable pursuant to the exercise of stock options and vesting of performance shares. The difference in earnings per share under the two -class method was not significant at December 31, 2022, 2021 and 2020.       Year Ended December 31,       2022     2021     2020       (Dollar Amounts In Thousands Except Per Share Amounts)   Earnings Per Share                         Weighted average common shares outstanding     54,300,366       54,160,990       53,844,482   Net income available to common stockholders   $ 251,442     $ 207,672     $ 169,506   Basic earnings per common share   $ 4.63     $ 3.83     $ 3.15                             Weighted average common shares outstanding     54,300,366       54,160,990       53,844,482   Dilutive effects of assumed exercise of stock options and vesting of performance shares     234,408       273,583       374,555   Weighted average common and dilutive potential common shares outstanding     54,534,774       54,434,573       54,219,037   Net income available to common stockholders   $ 251,442     $ 207,672     $ 169,506   Diluted earnings per common share   $ 4.61     $ 3.82     $ 3.13     98       NOTE 20.           RELATED PARTY TRANSACTIONS   As more fully described in Note 3 “ Loans ”, the Company had outstanding loan balances, as made in the ordinary course of business, to related parties as of December 31, 2022 and 2021 in the amount of $ 52.6 million and $ 51.2 million, respectively. Deposits of related parties are also accepted in the ordinary course of business. The aggregate balances of related party deposits are insignificant as of December 31, 2022 and 2021, respectively.     NOTE 21.           FAIR VALUE MEASUREMENT   Measurement of fair value under U.S. GAAP establishes a hierarchy that prioritizes observable and unobservable inputs used to measure fair value, as of the measurement date, into three broad levels, which are described below:   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.   In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and also considers counterparty credit risk in its assessment of fair value.   Debt Securities . Where quoted prices are available in an active market, securities are classified within Level 1 of the hierarchy. Level 1 securities include highly liquid government securities such as U.S. Treasuries and exchange-traded equity securities. For securities traded in secondary markets for which quoted market prices are not available, the Company generally relies on pricing services provided by independent vendors. Such independent pricing services are to advise the Company on the carrying value of the securities available for sale portfolio. As part of the Company’s procedures, the price provided from the service is evaluated for reasonableness given market changes. When a questionable price exists, the Company investigates further to determine if the price is valid. If needed, other market participants may be utilized to determine the correct fair value. The Company has also reviewed and confirmed its determinations in discussions with the pricing service regarding their methods of price discovery. Securities measured with these techniques are classified within Level 2 of the hierarchy and often involve using quoted market prices for similar securities, pricing models or discounted cash flow calculations using inputs observable in the market where available. Examples include U.S. government agency securities, mortgage-backed securities, obligations of states and political subdivisions, and certain corporate, asset-backed and other securities. In cases where Level 1 or Level 2 inputs are not available, as in the case of certain corporate securities, these securities are classified in Level 3 of the hierarchy.   Derivative instruments . The fair values of derivatives are determined based on a valuation pricing model using readily available observable market parameters such as interest rate curves, adjusted for counterparty credit risk. These measurements are classified as level  2  within the valuation hierarchy.   Loans Individually Evaluated. Loans individually evaluated are measured and reported at fair value when full payment under the loan terms is not probable. Loans individually evaluated are carried at the present value of expected future cash flows using the loan’s existing rate in a discounted cash flow calculation, or the fair value of the collateral if the loan is collateral-dependent. Expected cash flows are based on internal inputs reflecting expected default rates on contractual cash flows. This method of estimating fair value does not incorporate the exit-price concept of fair value described in ASC 820 - 10 and would generally result in a higher value than the exit-price approach. For loans measured using the estimated fair value of collateral less costs to sell, fair value is generally determined based on appraisals performed by certified and licensed appraisers using inputs such as absorption rates, capitalization rates and market comparables, adjusted for estimated costs to sell. Management modifies the appraised values, if needed, to take into account recent developments in the market or other factors, such as changes in absorption rates or market conditions from the time of valuation, and anticipated sales values considering management’s plans for disposition. Such modifications to the appraised values could result in lower valuations of such collateral. Estimated costs to sell are based on current amounts of disposal costs for similar assets. These measurements are classified as Level 3 within the valuation hierarchy. Loans individually evaluated are subject to nonrecurring fair value adjustment upon initial recognition or subsequent individual evaluation. A portion of the allowance for credit losses is allocated to loans individually evaluated if the value of such loans is deemed to be less than the unpaid balance. The range of fair value adjustments and weighted average adjustments as of  December 31, 2022  was  0 % to 82 % and 19.5 %, respectively.  The range of fair value adjustments and weighted average adjustment as of  December 31, 2021  was  0 % to 75 % and 24.1 %, respectively.  Loans individually evaluated are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly based on the same factors identified above. The amount recognized to write-down individually evaluated loans that are measured at fair value on a nonrecurring basis was $ 4.2 million and $ 6.2 million during the years ended December 31, 2022 and 2021, respectively.   99     Other Real Estate Owned and Repossessed Assets . Other real estate assets (“OREO”) acquired through, or in lieu of, foreclosure are held for sale and are initially recorded at the lower of cost or fair value, less selling costs. Any write-downs to fair value at the time of transfer to OREO are charged to the allowance for credit losses subsequent to foreclosure. Values are derived from appraisals of underlying collateral and discounted cash flow analysis. Appraisals are performed by certified and licensed appraisers. Subsequent to foreclosure, valuations are updated periodically and assets are marked to current fair value, not to exceed the new cost basis. In the determination of fair value subsequent to foreclosure, management also considers other factors or recent developments, such as changes in absorption rates and market conditions from the time of valuation, and anticipated sales values considering management’s plans for disposition, which could result in adjustment to lower the property value estimates indicated in the appraisals. The range of fair value adjustments and weighted average adjustment as of  December 31, 2022  was  0 % to  100 % and  53.3 %, respectively.   The range of fair value adjustments and weighted average adjustment as of  December 31, 2021  was  0 % to  100 % and  40.6 %, respectively. These measurements are classified as Level 3 within the valuation hierarchy. Net losses on the sale and write-downs of OREO of $ 153,000 and $ 1.1 million was recognized during the years ended December 31, 2022 and 2021, respectively. These charges were for write-downs in the value of OREO subsequent to foreclosure and losses on the disposal of OREO. OREO is classified within Level 3 of the hierarchy.   There were two residential real estate loan foreclosures for $ 248,000 classified as OREO as of December 31, 2022, compared to $ 50,000 classified as OREO as of December 31, 2021.   There were no residential real estate loan that was in the process of being foreclosed as of December 31, 2022, compared one residential real estate loan that was in the process of being foreclosed for $ 299,000 as of December 31, 2021.   The following table presents the Company’s financial assets and financial liabilities carried at fair value on a recurring basis as of December 31, 2022 and 2021. There were no liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021.       Fair Value Measurements at December 31, 2022 Using       Quoted Prices in                               Active Markets     Significant Other     Significant               for Identical     Observable Inputs     Unobservable               Assets (Level 1)     (Level 2)     Inputs (Level 3)     Total   Assets Measured on a Recurring Basis:   (In Thousands)   Available-for-sale debt securities:                                 U.S. Treasury securities   $ 2,969     $ -     $ -     $ 2,969   Government agency securities     -       9       -       9   Mortgage-backed securities     -       249,703       -       249,703   State and municipal securities     -       13,609       -       13,609   Corporate debt     -       367,665       10,860       378,525   Total available-for-sale debt securities     2,969       630,986       10,860       644,815   Interest rate cap derivative     -       4,201       -       4,201   Total assets at fair value   $ 2,969     $ 635,187     $ 10,860     $ 649,016         Fair Value Measurements at December 31, 2021 Using       Quoted Prices in                               Active Markets     Significant Other     Significant               for Identical     Observable Inputs     Unobservable               Assets (Level 1)     (Level 2)     Inputs (Level 3)     Total   Assets Measured on a Recurring Basis:   (In Thousands)   Available-for-sale debt securities:                                 U.S. Treasury securities   $ 9,104     $ -     $ -     $ 9,104   Government agency securities     -       6,041       -       6,041   Mortgage-backed securities     -       425,161       -       425,161   State and municipal securities     -       21,634       -       21,634   Corporate debt     -       363,638       16,992       380,630   Total available-for-sale debt securities     9,104       816,474       16,992       842,570   Interest rate cap derivative     -       1,152       -       1,152   Total assets at fair value   $ 9,104     $ 817,626     $ 16,992     $ 843,722     100     The carrying amount and estimated fair value of the Company’s financial instruments measured on a nonrecurring basis were as follows:       Fair Value Measurements at December 31, 2022 Using       Quoted Prices in                               Active Markets     Significant Other     Significant               for Identical     Observable     Unobservable               Assets (Level 1)     Inputs (Level 2)     Inputs (Level 3)     Total   Assets Measured on a Nonrecurring Basis:   (In Thousands)   Loans individually evaluated   $ -     $ -     $ 73,017     $ 73,017   Other real estate owned and repossessed assets     -       -       248       248   Total assets at fair value   $ -     $ -     $ 73,265     $ 73,265         Fair Value Measurements at December 31, 2021 Using       Quoted Prices in                               Active Markets     Significant Other     Significant               for Identical     Observable     Unobservable               Assets (Level 1)     Inputs (Level 2)     Inputs (Level 3)     Total   Assets Measured on a Nonrecurring Basis:   (In Thousands)   Loans individually evaluated   $ -     $ -     $ 73,173     $ 73,173   Other real estate owned and repossessed assets     -       -       1,208       1,208   Total assets at fair value   $ -     $ -     $ 74,381     $ 74,381     There were no liabilities measured at fair value on a non-recurring basis as of December 31, 2022 and 2021.   In the case of the debt securities portfolio, the Company monitors the portfolio to ascertain when transfers between levels have been affected. For the year ended December 31, 2022, there were four transfers between Levels 1, 2 or 3.   The table below includes a rollforward of the balance sheet amounts for the years ended December 31, 2022 and 2021 (including the change in fair value) for financial instruments classified by the Company within Level 3 of the valuation hierarchy measured at fair value on a recurring basis including changes in fair value due in part to observable factors that are part of the valuation methodology:       For the year ended December 31,       2022     2021       Available-for-sale Securities     Available-for-sale Securities       (In Thousands)   Fair value, beginning of period   $ 16,992     $ -   Transfers into Level 3     4,860       6,000   Total realized gains included in income     -       -   Changes in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at period-end     ( 805 )     492   Purchases     -       18,000   Transfers out of Level 3     ( 10,187 )     ( 7,500 ) Fair value, end of period   $ 10,860     $ 16,992     The fair value of a financial instrument is the current amount that would be exchanged in a sale between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Current U.S. GAAP excludes certain financial instruments and all nonfinancial instruments from its fair value disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.   101         December 31,       2022     2021       Carrying Amount     Fair Value     Carrying Amount     Fair Value       (In Thousands)   Financial Assets:                                 Level 1 Inputs:                                 Cash and cash equivalents   $ 814,538     $ 814,538     $ 4,163,724     $ 4,163,724   Held to maturity U.S. Treasury securities     507,151       470,954       149,263       148,620                                     Level 2 Inputs:                                 Federal funds sold     1,515       1,515       58,372       58,372   Held to maturity debt securities     526,720       464,749       313,444       317,416   Mortgage loans held for sale     1,607       1,604       1,114       1,111   Restricted equity securities     7,734       7,734       7,311       7,311                                     Level 3 Inputs:                                 Held to maturity debt securities     250       250       250       250   Loans, net     11,541,671       11,265,517       9,416,274       9,403,012                                     Financial Liabilities:                                 Level 2 Inputs:                                 Deposits   $ 11,546,805     $ 11,529,647     $ 12,452,836     $ 12,454,140   Federal funds purchased     1,618,798       1,618,798       1,711,777       1,711,777   Other borrowings     64,726       57,101       64,706       65,475       NOTE 22.           PARENT COMPANY FINANCIAL INFORMATION   The following information presents the condensed balance sheet of the Company as of December 31, 2022 and 2021 and the condensed statements of income and cash flows for the years ended December 31, 2022, 2021 and 2020.   CONDENSED BALANCE SHEETS   (In Thousands)       December 31, 2022     December 31, 2021   ASSETS                 Cash and due from banks   $ 19,292     $ 14,553   Investment in subsidiary     1,357,058       1,212,850   Other assets     983       1,291   Total assets   $ 1,377,333     $ 1,228,694                     LIABILITIES AND STOCKHOLDERS' EQUITY                 Liabilities:                 Other borrowings   $ 64,726     $ 64,706   Other liabilities     15,211       12,473   Total liabilities     79,937       77,179   Stockholders' equity:                 Preferred stock, par value $ 0.001 per share; 1,000,000 authorized and undesignated at December 31, 2022 and December 31, 2021     -       -   Common stock, par value $ 0.001 per share; 200,000,000 shares authorized and  54,329,527 shares issued and outstanding at December 31, 2022; and  100,000,000 shares authorized and 54,227,060 shares issued and outstanding at December 31, 2021     54       54   Additional paid-in capital     229,693       226,397   Retained earnings     1,109,902       911,008   Accumulated other comprehensive (loss) income     ( 42,253 )     14,056   Total stockholders' equity     1,297,396       1,151,515   Total liabilities and stockholders' equity   $ 1,377,333     $ 1,228,694     102       CONDENSED STATEMENTS OF INCOME   FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 and 2020   (In Thousands)       2022     2021     2020   Income:                         Dividends received from subsidiary   $ 57,500     $ 46,000     $ 45,000   Total income     57,500       46,000       45,000   Expense:                         Other expenses     2,760       2,715       2,936   Total expenses     2,760       2,715       2,936   Equity in undistributed earnings of subsidiary     196,764       164,387       127,442   Net income     251,504       207,672       169,506   Net income available to common stockholders   $ 251,504     $ 207,672     $ 169,506     STATEMENTS OF CASH FLOW   FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020   (In Thousands)       2022     2021     2020   Operating activities                         Net income   $ 251,504     $ 207,672     $ 169,506   Adjustments to reconcile net income to net cash provided by operating activities:                         Other     661       ( 93 )     204   Equity in undistributed earnings of subsidiary     ( 196,764 )     ( 164,387 )     ( 127,442 ) Net cash provided by operating activities     55,401       43,192       42,268   Investing activities                         Other     ( 750 )     ( 120 )     -   Net cash used in investing activities     ( 750 )     ( 120 )     -   Financing activities                         Proceeds from issuance of subordinated notes     -       -       34,710   Redemption of subordinated notes     -       -       ( 34,750 ) Dividends paid on common stock     ( 49,942 )     ( 43,204 )     ( 37,614 ) Net cash used in financing activities     ( 49,942 )     ( 43,204 )     ( 37,654 ) Net change in cash and cash equivalents     4,709       ( 132 )     4,614   Cash and cash equivalents at beginning of year     14,553       14,685       10,071   Cash and cash equivalents at end of year   $ 19,262     $ 14,553     $ 14,685       ITEM 9.             CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.   There were no disagreements with accountants regarding accounting and financial disclosure matters during the year ended December 31, 2022.   ITEM 9A.          CONTROLS AND PROCEDURES   Evaluation of Disclosure Controls and Procedures   Our management, under supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based upon that evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2022.   Changes in Internal Control over Financial Reporting   The Chief Executive Officer and Chief Financial Officer have concluded that there were no changes in our internal control over financial reporting identified in the evaluation of the effectiveness of our disclosure controls and procedures that occurred during the fiscal quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   103     Management ’ s Report on Internal Control over Financial Reporting   Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 14d-14(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.   All internal controls systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements in the Company’s financial statements, including the possibility of circumvention or overriding of controls. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.   As of December 31, 2022, management assessed the effectiveness of our internal control over financial reporting based on criteria for effective internal control over financial reporting established in “Internal Control – Integrated Framework (2013),” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the assessment, management determined that the Company maintained effective internal control over financial reporting as of December 31, 2022, based on those criteria.   The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, has been audited by FORVIS, LLP, an independent registered public accounting firm, as stated in their report herein — “Report of Independent Registered Public Accounting Firm.”   ITEM 9B.           OTHER INFORMATION   None.   ITEM 9C.           DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS   Not Applicable.   PART III   ITEM   10.           DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   We respond to this Item by incorporating by reference the material responsive to this Item in our definitive proxy statement to be filed with the Securities and Exchange Commission in connection with our 2023 Annual Meeting of Stockholders. Information regarding the Company’s executive officers is provided in Part I, Item 1 of this Form 10-K.   Code of Ethics Our Board of Directors has adopted a Code of Ethics that applies to all of our employees, officers and directors. The Code of Ethics covers compliance with law; fair and honest dealings with us, with competitors and with others; fair and honest disclosure to the public; and procedures for compliance with the Code of Ethics. A copy of the Code of Ethics is available on our website at www.servisfirstbank.com. We will disclose any amendments or waivers, including implicit waivers, of the Code of Ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, on our website.   ITEM 11.           EXECUTIVE COMPENSATION   We respond to this Item by incorporating by reference the material responsive to this Item in our definitive proxy statement to be filed with the Securities and Exchange Commission in connection with our 2023 Annual Meeting of Stockholders.   104     ITEM   12.           SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   We respond to this Item by incorporating by reference the material responsive to this Item in our definitive proxy statement to be filed with the Securities and Exchange Commission in connection with our 2023 Annual Meeting of Stockholders. The information called for by this item relating to “Securities Authorized for Issuance Under Equity Compensation Plans” is provided in Part II, Item 5 of this Form 10-K.   ITEM   13.           CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE   We respond to this Item by incorporating by reference the material responsive to this Item in our definitive proxy statement to be filed with the Securities and Exchange Commission in connection with our 2023 Annual Meeting of Stockholders.     ITEM   14.           PRINCIPAL ACCOUNTANT FEES AND SERVICES   We respond to this Item by incorporating by reference the material responsive to this Item in our definitive proxy statement to be filed with the Securities and Exchange Commission in connection with our 2023 Annual Meeting of Stockholders.   The Independent Registered Public Accounting Firm is FORVIS, LLP (PCAOB Firm ID NO. 686 ) located in Atlanta, Georgia .   PART IV   ITEM 15.           Exhibits, Financial Statement Schedules   (a)   The following statements are filed as a part of this Annual Report on Form 10-K       Page         Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements     63 Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting     65 Consolidated Balance Sheets at December 31, 2022 and 2021     66 Consolidated Statements of Income for the Years Ended December 31, 2022, 2021 and 2020     67 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021 and 2020     68 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2022, 2021 and 2020     69 Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020     70 Notes to Consolidated Financial Statements     71   (b)    All applicable financial statement schedules required under Regulation S-X have been included in the Notes to the Consolidated Financial Statements.   (c)    The following exhibits are furnished with this Annual Report on Form 10-K   EXHIBIT NO.   NAME OF EXHIBIT                   3.1   Restated Certificate of Incorporation as amended (incorporated by reference to Exhibit 3.02 to the Company's Quarterly Report on Form 10-Q, filed July 29, 2022).           3.2   Certificate of Elimination of the Senior-Non Cumulative Perpetual Preferred Stock, Series A (incorporated by reference to Exhibit 3.2 to the Company ’ s Current Report on Form 8-K/A, filed on June 28, 2016).           3.3   Bylaws (Restated for SEC filing purposes only) (incorporated by reference to Exhibit 3.1 to the Company ’ s Current Report on Form 8-K, filed on April 4, 2014).           4.1   Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’ s Registration Statement on Form 10, filed on March 28, 2008).     105     4.2   Revised Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’ s Current Report on Form 8-K, filed on September 15, 2008, Commission File No. 0-53149).           4.3   Description of Capital Stock (incorporated by reference to Exhibit 4.3 to the Company ’ s Annual Report on Form 10-K, filed on February 25, 2020).           10.1*   2009 Amended and Restated Stock Incentive Plan (incorporated by reference to Appendix A to the Company ’ s Definitive Proxy Statement on Schedule 14A, filed on March 18, 2014).           10.2*   Note Purchase Agreement, dated November 8, 2017, between ServisFirst Bancshares, Inc. and certain accredited investors (incorporated by reference to Exhibit 4.1 to the Company ’ s Current Report on Form 8-K, filed on November 9, 2017).           10.3*   Note Purchase Agreement, dated October 21, 2020, between ServisFirst Bancshares, Inc. and certain accredited investors (incorporated by reference to Exhibit 4.1 to the Company ’ s Current Report on Form 8-K, filed on October 22, 2020).           10.4*   First Amendment to the ServisFirst Bancshares, Inc. Amended and Restated 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company ’ s Quarterly Report on Form 10-Q, filed November 1, 2016).           10.5*   Form of Nonqualified Stock Option Award pursuant to the ServisFirst Bancshares, Inc. Amended and Restated 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company ’ s Quarterly Report on Form 10-Q, filed November 1, 2016).           10.6*   Form of Restricted Stock Award Agreement pursuant to the ServisFirst Bancshares, Inc. Amended and Restated 2009 Stock Incentive Plan (incorporated by reference to Exhibit 4.4 to the Company ’ s Registration Statement on Form S-8, filed June 17, 2014).           10.7*   Second Amendment to the ServisFirst Bancshares, Inc. Amended and Restated 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed September 17, 2018).           10.8*   Third Amendment to the ServisFirst Bancshares, Inc. Amended and Restated 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed April 30, 2019).           10.9*   Form of Nonqualified Stock Option Award (Revised 2019)(incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, filed April 30, 2019).           10.10*   Form of Restricted Stock Award Agreement (Revised 2019)(incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q, filed April 30, 2019).     106     10.11*   Endorsement Split-Dollar Agreement with Thomas A. Broughton III dated November 9, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed November 13, 2020.           10.12*   Endorsement Split-Dollar Agreement with William M. Foshee dated November 9, 2020 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed November 13, 2020.           10.13*   Endorsement Split-Dollar Agreement with Rodney E. Rushing dated November 9, 2020 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed November 13, 2020.           10.14*   Form of Executive Officer Change in Control Agreement (filed as Exhibit 10 to the Company’s Current Report on Form 8-K dated February 25, 2021)           10.15*   ServisFirst Bancshares, Inc. Annual Incentive Plan, effective January 1, 2021 (filed as Exhibit 10 to the Company’s Current Report on Form 8-K dated January 25, 2021)           10.16*   Form of ServisFirst Bancshares, Inc. 2021 Performance Share Award Agreement (filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed April 29, 2021).           10.17*   Form of ServisFirst Bancshares, Inc. 2021 Restricted Stock Award Agreement (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed April 29, 2021).           21   List of Subsidiaries           23   Consent of FORVIS, LLP           24   Power of Attorney           31.1   Certification of Chief Executive Officer pursuant to Rule 13a-14(a)           31.2   Certification of Chief Financial Officer pursuant to Rule 13a-14(a)           32.1   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350           32.2   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350           101.INS   Inline XBRL Instance Document           101.SCH   Inline XBRL Schema Documents           101.CAL   Inline XBRL Calculation Linkbase Document           101.LAB   Inline XBRL Label Linkbase Document           101.PRE   Inline XBRL Presentation Linkbase Document           101.DEF   Inline XBRL Definition Linkbase Document           104   Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)            * denotes management contract or compensatory plan or arrangement     107     ITEM   16.           FORM 10-K SUMMARY   None.   SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.       SERVISFIRST BANCSHARES, INC.       By: /s/Thomas A. Broughton, III                       Thomas A. Broughton, III     President and Chief Executive Officer     Dated: February 28, 2023   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.   Signature   Title Date       /s/ Thomas A. Broughton, III                       Chairman, President, Chief February 28, 2023      Thomas A. Broughton, III Executive Officer and Director (Principal Executive Officer)         /s/ William M. Foshee                                    William M. Foshee Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) February 28, 2023       *                                                               Director  February 28, 2023      Irma L. Tuder           *                                                                    Director  February 28, 2023      Michael D. Fuller           *                                                                    Director  February 28, 2023      James J. Filler           *                                                                    Director  February 28, 2023      Joseph R. Cashio           *                                                                    Director February 28, 2023      Hatton C. V. Smith           *                                                                    Director February 28, 2023      Christopher J. Mettler         *The undersigned, acting pursuant to a Power of Attorney, has signed this Annual Report on Form 10-K for and on behalf of the persons indicated above as such persons’ true and lawful attorney-in-fact and in their names, places and stated, in the capacities indicated above and on the date indicated below.   /s/ William M. Foshee                               William M. Foshee Attorney-in-Fact February 28, 2023   108