ServisFirst Bancshares, Inc. 10-Q

sfbs20230930_10q.htm   UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________ FORM 10-Q     (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023   ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______to_______   Commission file number 001-36452   SERVISFIRST BANCSHARES, INC. (Exact Name of Registrant as Specified in Its Charter)   Delaware 26-0734029 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)   2500 Woodcrest Place , Birmingham , Alabama 35209 (Address of Principal Executive Offices) (Zip Code)   ( 205 ) 949-0302 (Registrant's Telephone Number, Including Area Code)   Securities registered pursuant to Section 12(b) of the Act:   Title of each class Trading symbol(s) Name of each exchange on which registered Common stock, par value $.001 per share SFBS New York Stock Exchange   Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒ No ☐   Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒ No ☐   Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):   Large accelerated filer  ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company  ☐ Emerging growth company ☐   If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐ No ☒   Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.   Class Outstanding as of October 27, 2023 Common stock, $.001 par value 54,435,170                       TABLE OF CONTENTS     PART I. FINANCIAL INFORMATION 4 Item 1. Consolidated Financial Statements 4 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 3. Quantitative and Qualitative Disclosures about Market Risk 44 Item 4. Controls and Procedures 45     PART II. OTHER INFORMATION 45 Item 1. Legal Proceedings 45 Item 1A. Risk Factors 45 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3. Defaults Upon Senior Securities 46 Item 4. Mine Safety Disclosures 46 Item 5. Other Information 46 Item 6. Exhibits 46   EX-31.01 SECTION 302 CERTIFICATION OF THE CEO EX-31.02 SECTION 302 CERTIFICATION OF THE CFO EX-32.01 SECTION 906 CERTIFICATION OF THE CEO EX-32.02 SECTION 906 CERTIFICATION OF THE CFO             3       PART 1. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS   SERVISFIRST BANCSHARES, INC.   CONSOLIDATED BALANCE SHEETS   (In thousands, except share and per share amounts)                         September 30, 2023     December 31, 2022       (Unaudited)     (1)   ASSETS                 Cash and due from banks   $ 112,150     $ 106,317   Interest-bearing balances due from depository institutions     1,861,924       708,221   Federal funds sold     91,035       1,515   Cash and cash equivalents     2,065,109       816,053   Available-for-sale debt securities, at fair value     834,802       644,815   Held-to-maturity debt securities (fair value of $ 933,006 and $ 935,953 , respectively)     1,043,899       1,034,121   Restricted equity securities     10,226       7,734   Mortgage loans held for sale     6,333       1,607   Loans     11,641,130       11,687,968   Less allowance for credit losses     ( 152,247 )     ( 146,297 ) Loans, net     11,488,883       11,541,671   Premises and equipment, net     59,516       59,850   Accrued interest and dividends receivable     56,500       48,422   Deferred tax asset, net     66,029       60,448   Other real estate owned and repossessed assets     690       248   Bank owned life insurance contracts     291,521       287,752   Goodwill     13,615       13,615   Other assets     107,209       79,417   Total assets   $ 16,044,332     $ 14,595,753   LIABILITIES AND STOCKHOLDERS' EQUITY                 Liabilities:                 Deposits:                 Non-interest-bearing demand   $ 2,621,072     $ 3,321,347   Interest-bearing     10,521,304       8,225,458   Total deposits     13,142,376       11,546,805   Federal funds purchased     1,370,289       1,618,798   Other borrowings     64,751       64,726   Accrued interest and dividends payable     24,683       18,615   Other liabilities     40,849       48,913   Total liabilities     14,642,948       13,297,857   Stockholders' equity:                 Preferred stock, par value $ 0.001 per share; 1,000,000 authorized and undesignated at September 30, 2023 and December 31, 2022     -       -   Common stock, par value $ 0.001 per share; 200,000,000 shares authorized: 54,425,447 shares issued and outstanding at September 30, 2023; and 54,326,527 shares issued and outstanding at December 31, 2022     54       54   Additional paid-in capital     231,588       229,693   Retained earnings     1,229,080       1,109,902   Accumulated other comprehensive loss     ( 59,838 )     ( 42,253 ) Total stockholders' equity attributable to ServisFirst Bancshares, Inc.     1,400,884       1,297,396   Noncontrolling interest     500       500   Total stockholders' equity     1,401,384       1,297,896   Total liabilities and stockholders' equity   $ 16,044,332     $ 14,595,753     (1) Derived from audited financial statements.     See Notes to Consolidated Financial Statements.   4       SERVISFIRST BANCSHARES, INC.   CONSOLIDATED STATEMENTS OF INCOME   (In thousands, except per share amounts)   (Unaudited)                                         Three Months Ended     Nine Months Ended       September 30,     September 30,       2023     2022     2023     2022   Interest income:                                 Interest and fees on loans   $ 178,754     $ 131,375     $ 514,204     $ 345,767   Taxable securities     15,522       11,089       37,987       29,827   Nontaxable securities     15       30       53       110   Federal funds sold     985       632       1,826       738   Other interest and dividends     17,930       6,173       30,114       12,600   Total interest income     213,206       149,299       584,184       389,042   Interest expense:                                 Deposits     95,901       13,655       223,585       25,925   Borrowed funds     17,607       9,226       51,349       14,609   Total interest expense     113,508       22,881       274,934       40,534   Net interest income     99,698       126,418       309,250       348,508   Provision for credit losses     4,282       15,603       15,133       30,472   Net interest income after provision for credit losses     95,416       110,815       294,117       318,036   Noninterest income:                                 Service charges on deposit accounts     2,163       1,892       6,239       6,167   Mortgage banking     825       784       1,963       1,924   Credit card income     2,532       2,612       6,627       7,656   Securities losses     -       -       -       ( 6,168 ) Bank-owned life insurance income     1,818       1,637       5,935       6,978   Other operating income     797       2,014       2,274       9,836   Total noninterest income     8,135       8,939       23,038       26,393   Noninterest expenses:                                 Salaries and employee benefits     20,080       19,687       57,941       58,722   Equipment and occupancy expense     3,579       3,140       10,435       9,056   Third party processing and other services     6,549       7,213       20,031       19,163   Professional services     1,265       1,036       4,499       3,355   FDIC and other regulatory assessments     2,346       975       6,105       3,254   OREO expense     18       21       30       56   Other operating expenses     7,826       10,613       20,752       26,118   Total noninterest expenses     41,663       42,685       119,793       119,724   Income before income taxes     61,888       77,069       197,362       224,705   Provision for income taxes     8,548       13,038       32,583       40,925   Net income     53,340       64,031       164,779       183,780   Preferred stock dividends     -       -       31       31   Net income available to common stockholders   $ 53,340     $ 64,031     $ 164,748     $ 183,749                                     Basic earnings per common share   $ 0.98     $ 1.18     $ 3.03     $ 3.38   Diluted earnings per common share   $ 0.98     $ 1.17     $ 3.02     $ 3.37     See Notes to Consolidated Financial Statements.   5       SERVISFIRST BANCSHARES, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME   (In thousands)   (Unaudited)                                         Three Months Ended     Nine Months Ended       September 30,     September 30,       2023     2022     2023     2022   Net income   $ 53,340     $ 64,031     $ 164,779     $ 183,780   Other comprehensive loss, net of tax:                                 Unrealized net holding losses arising during period from securities available for sale, net of tax of $( 340 ) and $( 5,742 ) for the three and nine months ended September 30, 2023, respectively, and $( 5,707 ) and $( 18,409 ) for the three and nine months ended September 30, 2022, respectively     ( 1,016 )     ( 21,471 )     ( 17,138 )     ( 62,301 ) Amortization of net unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax of $( 53 ) and $( 150 ) for the three and nine months ended September 30, 2023, respectively, and $( 70 ) and $( 320 ) for the three and nine months ended September 30, 2022, respectively     ( 160 )     ( 262 )     ( 447 )     ( 1,208 ) Reclassification adjustment for net losses on sales of securities, net of tax of $ 1,295 for the nine months ended September 30, 2022     -       -       -       5,363   Other comprehensive loss, net of tax     ( 1,176 )     ( 21,733 )     ( 17,585 )     ( 58,146 ) Comprehensive income   $ 52,164     $ 42,298     $ 147,194     $ 125,634                       See Notes to Consolidated Financial Statements.                                 6       SERVISFIRST BANCSHARES, INC.   CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY   (In thousands, except share amounts) (Unaudited)                                                                         Three Months Ended September 30,       Common Shares     Preferred Stock     Common Stock     Additional Paid-in Capital     Retained Earnings     Accumulated Other Comprehensive Loss     Noncontrolling interest     Total Stockholders' Equity   Balance, July 1, 2022     54,306,875     $ -     $ 54     $ 227,906     $ 1,005,815     $ ( 22,357 )   $ 500     $ 1,211,918   Common dividends declared, $ 0.23 per share     -       -       -       -       ( 12,494 )     -       -       ( 12,494 ) Dividends on nonvested restricted stock recognized as compensation expense     -       -       -       -       35       -       -       35   Issue restricted shares pursuant to stock incentives, net of forfeitures     1,845       -       -       -       -       -       -       -   Issue shares of common stock upon exercise of stock options     15,287       -       -       218       -       -       -       218   2,551 shares of common stock withheld in net settlement upon exercise of stock options     -       -       -       ( 189 )     -       -       -       ( 189 ) Stock-based compensation expense     -       -       -       803       -       -       -       803   Other comprehensive loss, net of tax     -       -       -       -       -       ( 21,733 )     -       ( 21,733 ) Net income     -       -       -       -       64,031       -       -       64,031   Balance, September 30, 2022     54,324,007     $ -     $ 54     $ 228,738     $ 1,057,387     $ ( 44,090 )   $ 500     $ 1,242,589                                                                     Balance, July 1, 2023     54,425,033     $ -     $ 54     $ 230,659     $ 1,190,920     $ ( 58,662 )   $ 500     $ 1,363,471   Common dividends declared, $ 0.28 per share     -       -       -       -       ( 15,239 )     -       -       ( 15,239 ) Dividends on nonvested restricted stock recognized as compensation expense     -       -       -       -       59       -       -       59   Issue restricted shares pursuant to stock incentives, net of forfeitures     414       -       -       -       -       -       -       -   Stock-based compensation expense     -       -       -       929       -       -       -       929   Other comprehensive loss, net of tax     -       -       -       -       -       ( 1,176 )     -       ( 1,176 ) Net income     -       -       -       -       53,340       -       -       53,340   Balance, September 30, 2023     54,425,447     $ -     $ 54     $ 231,588     $ 1,229,080     $ ( 59,838 )   $ 500     $ 1,401,384     7         Nine Months Ended September 30,       Common Shares     Preferred Stock     Common Stock     Additional Paid-in Capital     Retained Earnings     Accumulated Other Comprehensive Income (Loss)     Noncontrolling interest     Total Stockholders' Equity   Balance, January 1, 2022     54,227,060     $ -     $ 54     $ 226,397     $ 911,008     $ 14,056     $ 500     $ 1,152,015   Common dividends paid, $ 0.46 per share     -       -       -       -       ( 24,976 )     -       -       ( 24,976 ) Common dividends declared, $ 0.23 per share     -       -       -       -       ( 12,494 )     -       -       ( 12,494 ) Preferred dividends paid     -       -       -       -       ( 31 )     -       -       ( 31 ) Dividends on nonvested restricted stock recognized as compensation expense     -       -       -       -       100       -       -       100   Issue restricted shares pursuant to stock incentives, net of forfeitures     44,613       -       -       -       -       -       -       -   Issue shares of common stock upon exercise of stock options     52,334       -       -       1,079       -       -       -       1,079   10,953 shares of common stock withheld in net settlement upon exercise of stock options     -       -       -       ( 1,129 )     -       -       -       ( 1,129 ) Stock-based compensation expense     -       -       -       2,391       -       -       -       2,391   Other comprehensive loss, net of tax     -       -       -       -       -       ( 58,146 )     -       ( 58,146 ) Net income     -       -       -       -       183,780       -       -       183,780   Balance, September 30, 2022     54,324,007     $ -     $ 54     $ 228,738     $ 1,057,387     $ ( 44,090 )   $ 500     $ 1,242,589                                                                     Balance, January 1, 2023     54,326,527     $ -     $ 54     $ 229,693     $ 1,109,902     $ ( 42,253 )   $ 500     $ 1,297,896   Common dividends paid, $ 0.56 per share     -       -       -       -       ( 30,472 )     -       -       ( 30,472 ) Common dividends declared, $ 0.28 per share     -       -       -       -       ( 15,239 )     -       -       ( 15,239 ) Preferred dividends paid     -       -       -       -       ( 31 )     -       -       ( 31 ) Dividends on nonvested restricted stock recognized as compensation expense     -       -       -       -       141       -       -       141   Issue restricted shares pursuant to stock incentives, net of forfeitures     37,682       -       -       -       -       -       -       -   Issue shares of common stock upon exercise of stock options     61,238       -       -       1,014       -       -       -       1,014   26,462 shares of common stock withheld in net settlement upon exercise of stock options     -       -       -       ( 1,838 )     -       -       -       ( 1,838 ) Stock-based compensation expense     -       -       -       2,719       -       -       -       2,719   Other comprehensive loss, net of tax     -       -       -       -       -       ( 17,585 )     -       ( 17,585 ) Net income     -       -       -       -       164,779       -       -       164,779   Balance, September 30, 2023     54,425,447     $ -     $ 54     $ 231,588     $ 1,229,080     $ ( 59,838 )   $ 500     $ 1,401,384     See Notes to Consolidated Financial Statements.   8       SERVISFIRST BANCSHARES, INC.   CONSOLIDATED STATEMENTS OF CASH FLOWS   (In thousands) (Unaudited)       Nine Months Ended September 30,       2023     2022   OPERATING ACTIVITIES                 Net income   $ 164,779     $ 183,780   Adjustments to reconcile net income to net cash provided by operations                 Deferred expense (benefit) tax     ( 5,581 )     476   Provision for credit losses     15,133       30,472   Depreciation     3,241       3,155   Accretion on acquired loans     148       108   Amortization of core deposit intangible     -       23   Amortization of investments in tax credit partnerships     9,114       8,786   Net amortization of debt securities available-for-sale     222       2,352   Increase in accrued interest and dividends receivable     ( 8,078 )     ( 5,115 ) Stock-based compensation expense     2,719       2,391   Increase in accrued interest and dividends payable     6,068       1,262   Proceeds from sale of mortgage loans held for sale     91,747       38,564   Originations of mortgage loans held for sale     ( 94,511 )     ( 37,529 ) Loss on sale of securities available for sale     -       6,168   Gain on sale of mortgage loans held for sale     ( 1,962 )     ( 1,924 ) Net loss (gain) on sale of other real estate owned and repossessed assets     28       ( 239 ) Write down of other real estate owned and repossessed assets     -       7   Increase in cash surrender value of life insurance contracts     ( 5,935 )     ( 6,978 ) Net change in other assets, liabilities, and other operating activities     ( 70,920 )     ( 29,074 ) Net cash provided by operating activities     106,212       196,685   INVESTMENT ACTIVITIES                 Purchases of debt securities available-for-sale     ( 626,728 )     ( 76,360 ) Proceeds from maturities, calls and paydowns of debt securities available-for-sale     436,523       95,691   Proceeds from sale of debt securities available-for-sale     -       75,036   Purchases of debt securities held-to-maturity     ( 48,723 )     ( 648,266 ) Proceeds from maturities, calls and paydowns of debt securities held-to-maturity     38,945       60,854   Purchases of restricted equity securities     ( 46,482 )     ( 423 ) Proceeds from sale of restricted equity securities     43,990       -   Investment in tax credit partnerships and SBIC     ( 7,303 )     ( 16,295 ) Return of capital from tax credit partnerships and SBIC     191       434   Decrease (increase) in loans     36,879       ( 1,752,905 ) Purchases of premises and equipment     ( 2,907 )     ( 1,935 ) Proceeds from death benefit of bank owned life insurance contracts     2,566       3,900   Proceeds from sale of other real estate owned and repossessed assets     158       1,240   Expenditures for other real estate owned     -       ( 93 ) Net cash used in investing activities     ( 172,891 )     ( 2,259,122 ) FINANCING ACTIVITIES                 Net decrease in non-interest-bearing deposits     ( 700,275 )     ( 1,137,831 ) Net increase (decrease) in interest-bearing deposits     2,295,846       ( 263,090 ) Net decrease in federal funds purchased     ( 248,509 )     ( 245,455 ) FHLB advances     300,000       -   Repayment of FHLB advances     ( 300,000 )     -   Proceeds from exercise of stock options     1,014       1,079   Taxes paid in net settlement of tax obligation upon exercise of stock options     ( 1,838 )     ( 1,129 ) Dividends paid on common stock     ( 30,472 )     ( 24,876 ) Dividends paid on preferred stock     ( 31 )     ( 31 ) Net cash provided by (used in) financing activities     1,315,735       ( 1,671,333 ) Net increase (decrease) in cash and cash equivalents     1,249,056       ( 3,733,770 ) Cash and cash equivalents at beginning of period     816,053       4,222,096   Cash and cash equivalents at end of period   $ 2,065,109     $ 488,326   SUPPLEMENTAL DISCLOSURE                 Cash paid/(received) for:                 Interest   $ 268,866     $ 39,272   Income taxes     53,991       55,375   Income tax refund     -       ( 142 ) NONCASH TRANSACTIONS                 Other real estate acquired in settlement of loans   $ 628     $ 1,045   Dividends on nonvested restricted stock reclassified as compensation expense     141       100   Dividends declared     15,239       12,494     See Notes to Consolidated Financial Statements.   9     SERVISFIRST BANCSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2023 (Unaudited)     NOTE 1 - GENERAL   The accompanying consolidated financial statements in this report have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, including Regulation S- X and the instructions for Form 10 -Q, and have not been audited. These consolidated financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments necessary to present fairly the consolidated financial position and the consolidated results of operations for the interim periods have been made. All such adjustments are of a normal nature. The consolidated results of operations are not necessarily indicative of the consolidated results of operations which ServisFirst Bancshares, Inc. (the “Company”) and its consolidated subsidiaries, including ServisFirst Bank (the “Bank”), may achieve for future interim periods or the entire year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Form 10 -K for the year ended December 31, 2022.   All reported amounts are in thousands except share and per share data.     NOTE 2 - CASH AND CASH EQUIVALENTS   Cash on hand, cash items in process of collection, amounts due from banks, and federal funds sold are included in cash and cash equivalents.     NOTE 3 - EARNINGS PER COMMON SHARE   Basic earnings per common share are computed by dividing net income 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. The difference in earnings per share under the two -class method was not significant for both the three and nine month periods ended September 30, 2023 and 2022.       Three Months Ended September 30,     Nine Months Ended September 30,       2023     2022     2023     2022       (In Thousands, Except Shares and Per Share Data)   Earnings per common share                                 Weighted average common shares outstanding     54,424,561       54,315,671       54,398,845       54,291,739   Net income available to common stockholders   $ 53,340     $ 64,031     $ 164,748     $ 183,749   Basic earnings per common share   $ 0.98     $ 1.18     $ 3.03     $ 3.38                                     Weighted average common shares outstanding     54,424,561       54,315,671       54,398,845       54,291,739   Dilutive effects of assumed exercise of stock options and vesting of performance shares     106,074       231,011       131,952       242,054   Weighted average common and dilutive potential common shares outstanding     54,530,635       54,546,682       54,530,797       54,533,793   Net income available to common stockholders   $ 53,340     $ 64,031     $ 164,748     $ 183,749   Diluted earnings per common share   $ 0.98     $ 1.17     $ 3.02     $ 3.37       NOTE 4 - SECURITIES   The amortized cost and fair value of available-for-sale and held-to-maturity securities at September 30, 2023 and December 31, 2022 are summarized as follows:   10                 Gross     Gross               Amortized     Unrealized     Unrealized     Fair       Cost     Gain     Loss     Value   September 30, 2023   (In Thousands)   Debt Securities Available-for-Sale                                 U.S. Treasury Securities   $ 280,807     $ 7     $ ( 96 )   $ 280,718   Mortgage-backed securities     251,001       -       ( 35,760 )     215,241   State and municipal securities     12,762       1       ( 1,570 )     11,193   Corporate debt     375,673       -       ( 48,023 )     327,650   Total   $ 920,243     $ 8     $ ( 85,449 )   $ 834,802   Debt Securities Held-to-Maturity                                 U.S. Treasury Securities   $ 558,196     $ -     $ ( 35,014 )   $ 523,182   Mortgage-backed securities     477,646       -       ( 74,928 )     402,718   State and municipal securities     8,057       -       ( 951 )     7,106   Total   $ 1,043,899     $ -     $ ( 110,893 )   $ 933,006                                     December 31, 2022                                 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     The amortized cost and fair value of debt securities as of September 30, 2023 and December 31, 2022 by contractual maturity are shown below. Actual maturities may differ from contractual maturities of mortgage-backed securities since the mortgages underlying the securities may be called or prepaid with or without penalty. Therefore, these securities are not included in the maturity categories along with the other categories of debt securities.       September 30, 2023     December 31, 2022       Amortized Cost     Fair Value     Amortized Cost     Fair Value       (In Thousands)   Debt securities available-for-sale                                 Due within one year   $ 292,131     $ 291,740     $ 24,712     $ 24,432   Due from one to five years     66,668       63,623       58,554       57,092   Due from five to ten years     307,443       261,919       338,630       311,100   Due after ten years     3,000       2,279       3,000       2,488   Mortgage-backed securities     251,001       215,241       282,480       249,703       $ 920,243     $ 834,802     $ 707,376     $ 644,815                                     Debt securities held-to-maturity                                 Due within one year   $ 309,311     $ 304,931     $ 250     $ 250   Due from one to five years     128,708       115,557       386,465       366,095   Due from five to ten years     128,234       109,800       128,477       111,632   Mortgage-backed securities     477,646       402,718       518,929       457,976       $ 1,043,899     $ 933,006     $ 1,034,121     $ 935,953     All mortgage-backed securities are with government-sponsored enterprises (GSEs) such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.   Restricted equity securities are comprised entirely of restricted investment in Federal Home Loan Bank stock for membership requirements.   The carrying value of investment securities pledged to secure public funds on deposit and for other purposes as required by law as of September 30, 2023 and December 31, 2022 was $ 1.45 billion and $ 789.3 million, respectively.   11     The following table identifies, as of September 30, 2023 and December 31, 2022, 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.       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)   September 30, 2023                                                 Debt Securities available-for-sale                                                 U.S. Treasury Securities   $ ( 96 )   $ 231,360     $ -     $ -     $ ( 96 )   $ 231,360   Mortgage-backed securities     ( 33 )     1,137       ( 35,727 )     214,104       ( 35,760 )     215,241   State and municipal securities     -       -       ( 1,570 )     10,462       ( 1,570 )     10,462   Corporate debt     ( 772 )     13,660       ( 47,251 )     305,631       ( 48,023 )     319,291   Total   $ ( 901 )   $ 246,157     $ ( 84,548 )   $ 530,197     $ ( 85,449 )   $ 776,354   Debt Securities held-to-maturity                                                 U.S. Treasury Securities   $ ( 6 )   $ 49,669     $ ( 35,008 )   $ 473,513     $ ( 35,014 )   $ 523,182   Mortgage-backed securities     ( 38 )     846       ( 74,890 )     398,551       ( 74,928 )     399,396   State and municipal securities     -       -       ( 951 )     6,856       ( 951 )     6,856   Total   $ ( 44 )   $ 50,515     $ ( 110,849 )   $ 878,920     $ ( 110,893 )   $ 929,434   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 )   $ 633,149   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     At September 30, 2023 and 2022, 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 September 30, 2023 and 2022, 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 September 30, 2023 and 2022. All debt securities in an unrealized loss position as of September 30, 2023 continue to perform as scheduled and the Company does not believe there is an expected credit loss or that an allowance for credit loss on these debt securities is necessary.   The following table summarizes information about sales of debt securities available-for-sale.       Nine Months Ended September 30,       2023     2022       (In Thousands)   Sale proceeds   $ -     $ 75,036   Gross realized gains   $ -     $ -   Gross realized losses     -       ( 6,168 ) Net realized gain (loss)   $ -     $ ( 6,168 )   12       NOTE 5 – 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 the Bank with the Federal Deposit Insurance Corporation (FDIC).   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 following table details the Company’s loans at September 30, 2023 and December 31, 2022:       September 30,     December 31,       2023     2022                         (Dollars In Thousands)   Commercial, financial and agricultural   $ 2,890,535     $ 3,145,317   Real estate - construction     1,509,937       1,532,388   Real estate - mortgage:                 Owner-occupied commercial     2,237,684       2,199,280   1-4 family mortgage     1,170,099       1,146,831   Other mortgage     3,766,124       3,597,750   Subtotal: Real estate - mortgage     7,173,907       6,943,861   Consumer     66,751       66,402   Total Loans     11,641,130       11,687,968   Less: Allowance for credit losses     ( 152,247 )     ( 146,297 ) Net Loans   $ 11,488,883     $ 11,541,671                                       Commercial, financial and agricultural     24.83 %     26.91 % Real estate - construction     12.97 %     13.11 % Real estate - mortgage:                 Owner-occupied commercial     19.22 %     18.82 % 1-4 family mortgage     10.05 %     9.81 % Other mortgage     32.36 %     30.78 % Subtotal: Real estate - mortgage     61.63 %     59.41 % Consumer     0.57 %     0.57 % Total Loans     100.00 %     100.00 %   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 credit 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 borrower (or guarantors, 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 currently jeopardize debt repayment. These loans are characterized by the distinct possibility that the company 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.   13     The table below presents loan balances classified by credit quality indicator, loan type and based on year of origination as of September 30, 2023 :       2023     2022     2021     2020     2019     Prior     Revolving Loans     Revolving lines of credit converted to term loans     Total       (In Thousands)   Commercial, financial and agricultural                                                                   Pass   $ 259,905     $ 482,415     $ 411,742     $ 174,227     $ 107,571     $ 167,772     $ 1,180,671     $ 565     $ 2,784,868   Special Mention     504       2,368       8,285       6,070       1,629       6,317       25,731       13       50,917   Substandard - accruing     1,457       -       409       372       9,501       28,642       5,718       -       46,099   Substandard -Non-accrual     -       475       914       485       -       3,147       3,630       -       8,651   Total Commercial, financial and agricultural   $ 261,866     $ 485,258     $ 421,350     $ 181,154     $ 118,701     $ 205,878     $ 1,215,750     $ 578     $ 2,890,535   Current-period gross charge-offs     1,213       4,677       2,531       -       4       476       1,497       -       10,398                                                                             Real estate - construction                                                                         Pass   $ 137,298     $ 867,332     $ 353,340     $ 55,083     $ 6,071     $ 21,297     $ 67,763     $ -     $ 1,508,184   Special Mention     3       556       -       -       -       -       -       -       559   Substandard - accruing     -       -       -       -       -       994       -       -       994   Substandard -Non-accrual     -       -       -       -       -       -       -       200       200   Total Real estate - construction   $ 137,301     $ 867,888     $ 353,340     $ 55,083     $ 6,071     $ 22,291     $ 67,763     $ 200     $ 1,509,937   Current-period gross charge-offs     -       -       19       -       -       -       -       -       19                                                                             Owner-occupied commercial                                                                         Pass   $ 93,823     $ 455,222     $ 533,643     $ 305,149     $ 186,042     $ 546,139     $ 64,968     $ 854     $ 2,185,840   Special Mention     5,380       1,426       7,757       8,344       8,605       7,591       -       -       39,103   Substandard - accruing     1,383       -       -       -       -       4,353       -       -       5,736   Substandard -Non-accrual     -       -       -       -       2,329       4,676       -       -       7,005   Total Owner-occupied commercial   $ 100,586     $ 456,648     $ 541,400     $ 313,493     $ 196,976     $ 562,759     $ 64,968     $ 854     $ 2,237,684   Current-period gross charge-offs     -       -       -       -       117       -       -       -       117                                                                             1-4 family mortgage                                                                         Pass   $ 111,341     $ 373,591     $ 234,258     $ 77,861     $ 47,905     $ 65,376     $ 248,681     $ -     $ 1,159,013   Special Mention     622       379       2,075       1,022       100       230       1,427       -       5,855   Substandard - accruing     -       -       -       -       -       429       253       -       682   Substandard -Non-accrual     -       903       976       729       763       1,178       -       -       4,549   Total 1-4 family mortgage   $ 111,963     $ 374,873     $ 237,309     $ 79,612     $ 48,768     $ 67,213     $ 250,361     $ -     $ 1,170,099   Current-period gross charge-offs     -       40       -       -       -       -       -       -       40                                                                             Other mortgage                                                                         Pass   $ 86,069     $ 1,105,884     $ 1,116,900     $ 498,233     $ 282,615     $ 562,626     $ 100,756     $ 247     $ 3,753,330   Special Mention     -       -       -       -       -       -       1,050       -       1,050   Substandard - accruing     -       231       -       -       -       11,007       -       -       11,238   Substandard -Non-accrual     -       -       -       -       130       376       -       -       506   Total Other mortgage   $ 86,069     $ 1,106,115     $ 1,116,900     $ 498,233     $ 282,745     $ 574,009     $ 101,806     $ 247     $ 3,766,124                                                                             Consumer                                                                         Pass   $ 20,592     $ 4,014     $ 4,781     $ 2,077     $ 1,412     $ 2,752     $ 31,123     $ -     $ 66,751   Special Mention     -       -       -       -       -       -       -       -       -   Substandard - accruing     -       -       -       -       -       -       -       -       -   Total Consumer   $ 20,592     $ 4,014     $ 4,781     $ 2,077     $ 1,412     $ 2,752     $ 31,123     $ -     $ 66,751   Current-period gross charge-offs     -       -       -       -       -       -       842       -       842                                                                             Total Loans                                                                         Pass   $ 709,028     $ 3,288,458     $ 2,654,664     $ 1,112,630     $ 631,616     $ 1,365,962     $ 1,693,962     $ 1,666     $ 11,457,986   Special Mention     6,509       4,729       18,117       15,436       10,334       14,138       28,208       13       97,484   Substandard - accruing     2,840       231       409       372       9,501       45,425       5,971       -       64,749   Substandard -Non-accrual     -       1,378       1,890       1,214       3,222       9,377       3,630       200       20,911   Total Loans   $ 718,377     $ 3,294,796     $ 2,675,080     $ 1,129,652     $ 654,673     $ 1,434,902     $ 1,731,771     $ 1,879     $ 11,641,130   Current-period gross charge-offs   $ 1,213     $ 4,717     $ 2,550     $ -     $ 121     $ 476     $ 2,339     $ -     $ 11,416     14     The table below presents loan balances classified by credit quality indicator, loan type and based on year of origination as of December 31, 2022:                                                       Revolving               2022     2021     2020     2019     2018     Prior     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   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   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   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   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   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     -       -       -       -       -       -       -       -   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   Total Loans   $ 3,184,887     $ 2,897,101     $ 1,349,872     $ 809,041     $ 435,399     $ 1,209,613     $ 1,802,055     $ 11,687,968     15     Loans by performance status as of September 30, 2023 and December 31, 2022 were as follows:   September 30, 2023   Performing     Nonperforming     Total                                 (In Thousands)   Commercial, financial and agricultural   $ 2,881,861     $ 8,674     $ 2,890,535   Real estate - construction     1,509,737       200       1,509,937   Real estate - mortgage:                         Owner-occupied commercial     2,230,678       7,006       2,237,684   1-4 family mortgage     1,164,055       6,044       1,170,099   Other mortgage     3,765,618       506       3,766,124   Total real estate mortgage     7,160,351       13,556       7,173,907   Consumer     66,578       173       66,751   Total   $ 11,618,527     $ 22,603     $ 11,641,130                             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     16     Loans by past due status as of September 30, 2023 and December 31, 2022 were as follows:   September 30, 2023   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   $ 2,810     $ 105     $ 24     $ 2,939     $ 8,650     $ 2,878,946     $ 2,890,535     $ 4,564   Real estate - construction     511       -       -       511       200       1,509,226       1,509,937       8,320   Real estate - mortgage:                                                                 Owner-occupied commercial     95       -       -       95       7,006       2,230,583       2,237,684       6,841   1-4 family mortgage     2,786       26       1,495       4,307       4,549       1,161,243       1,170,099       874   Other mortgage     -       1,050       -       1,050       506       3,764,568       3,766,124       506   Total real estate - mortgage     2,881       1,076       1,495       5,452       12,061       7,156,394       7,173,907       8,221   Consumer     256       25       173       454       -       66,297       66,751       -   Total   $ 6,458     $ 1,206     $ 1,692     $ 9,356     $ 20,911     $ 11,610,863     $ 11,641,130     $ 21,105                                                                     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     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. C&I revolving lines of credit and credit cards are members of the Commercial, financial and agricultural and Consumer portfolios, respectively. 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 September 30, 2023 and December 31, 2022, 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.  The Company expects the national unemployment rate to decline and the national GDP growth rate to improve compared to the December 31, 2022 forecast.   The Company uses a loss-rate method to estimate expected credit losses for its C&I revolving lines of credit and 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, financial and agricultural loans include risks associated with the 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 the 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.   17     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.   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.   The following table presents changes in the ACL, segregated by loan type, for the three and nine months ended September 30, 2023 and September 30, 2022.       Commercial,                                       financial and     Real estate -     Real estate -                       agricultural     construction     mortgage     Consumer     Total                                                 (In Thousands)       Three Months Ended September 30, 2023   Allowance for credit losses:                                         Balance at July 1, 2023   $ 43,465     $ 40,443     $ 66,237     $ 2,127     $ 152,272   Charge-offs     ( 4,783 )     ( 19 )     -       ( 341 )     ( 5,143 ) Recoveries     825       -       -       11       836   Provision     6,454       ( 2,401 )     37       192       4,282   Balance at September 30, 2023   $ 45,961     $ 38,023     $ 66,274     $ 1,989     $ 152,247                                                 Three Months Ended September 30, 2022   Allowance for credit losses:                                         Balance at July 1, 2022   $ 41,610     $ 35,992     $ 48,793     $ 1,992     $ 128,387   Charge-offs     ( 2,902 )     -       ( 170 )     ( 260 )     ( 3,332 ) Recoveries     297       -       -       12       309   Provision     3,829       4,024       7,420       330       15,603   Balance at September 30, 2022   $ 42,834     $ 40,016     $ 56,043     $ 2,074     $ 140,967                                                 Nine Months Ended September 30, 2023   Allowance for credit losses:                                         Balance at January 1, 2023   $ 42,830     $ 42,889     $ 58,652     $ 1,926     $ 146,297   Charge-offs     ( 10,398 )     ( 19 )     ( 157 )     ( 842 )     ( 11,416 ) Recoveries     2,187       3       -       43       2,233   Provision     11,342       ( 4,850 )     7,779       862       15,133   Balance at September 30, 2023   $ 45,961     $ 38,023     $ 66,274     $ 1,989     $ 152,247                                                 Nine Months Ended September 30, 2022   Allowance for credit losses:                                         Balance at January 1, 2022   $ 41,869     $ 26,994     $ 45,829     $ 1,968     $ 116,660   Charge-offs     ( 7,141 )     -       ( 221 )     ( 459 )     ( 7,821 ) Recoveries     1,619       -       -       37       1,656   Provision     6,487       13,022       10,435       528       30,472   Balance at September 30, 2022   $ 42,834     $ 40,016     $ 56,043     $ 2,074     $ 140,967     18     We maintain an ACL on unfunded 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 Sheet within other liabilities, while the corresponding provision for these credit losses is recorded as a component of other expense. The ACL on unfunded commitments was $ 575,000 at both September 30, 2023 and at December 31, 2022. There was no provision expense for the three and nine months ended September 30, 2023, respectively, and provision expense was $ 329,000 and $ 629,000 for the three and nine months ended September 30, 2022, respectively.   Loans that no longer share similar risk characteristics with 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   September 30, 2023   Real Estate     Receivable     Equipment     Other     Total     Allocation       (In Thousands)   Commercial, financial and agricultural   $ 20,457     $ 10,686     $ 830     $ 23,917     $ 55,890     $ 15,025   Real estate - construction     200       -       -       994       1,194       90   Real estate - mortgage:                                                 Owner-occupied commercial     12,029       -       -       709       12,738       1.530   1-4 family mortgage     10,933       -       -       -       10,933       73   Other mortgage     5,944       -       -       -       5,944       411   Total real estate - mortgage     28,906       -       -       709       29,615       2,014   Consumer     -       -       -       -       -       -   Total   $ 49,563     $ 10,686     $ 830     $ 25,620     $ 86,699     $ 17,129                 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   Consumer     -       -       -       -       -       -   Total   $ 44,205     $ 12,092     $ 837     $ 26,270     $ 83,404     $ 10,387     19     On March 22, 2020, an Interagency Statement was issued by banking regulators that encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of COVID- 19. Additionally, Section 4013 of the CARES Act further provides that a qualified loan modification is exempt by law from classification as a Troubled Debt Restructuring (“TDR”) as defined by U.S. 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 terminated. 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 was 60 days after the date on which the national COVID- 19 emergency terminated. In accordance with such guidance, the Bank offered short-term modifications made in response to COVID- 19 to borrowers who are current and otherwise not past due. These include 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 are insignificant.   The Bank adopted the Financial Accounting Standards Board's ("FASB") Accounting Standards Update (“ASU”) 2022 - 02, Financial Instruments - Credit Losses (Topic 326 ) Troubled Debt Restructurings and Vintage Disclosures effective January 1, 2023. The amendments in ASU 2022 - 02 eliminated the recognition and measure of TDRs and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.   The table below details the amortized cost basis at the end of the reporting period for loans made to borrowers experiencing financial difficulty that were modified during the three and nine months ended September 30, 2023:       Three Months Ended September 30, 2023               Payment Deferral                       Term     and Term             Percentage of       Extensions     Extensions     Total     Total Loans       (In Thousands)                                     Commercial, financial and agricultural   $ 25,339     $ -     $ 25,339       0.22 % Other mortgage     303       -       303       - % Total   $ 25,642     $ -     $ 25,642       0.22 %                                       Nine Months Ended September 30, 2023               Payment Deferral                       Term     and Term             Percentage of       Extensions     Extensions     Total     Total Loans       (In Thousands)                                     Commercial, financial and agricultural   $ 39,631     $ -     $ 39,631       0.34 % Real estate - construction     200       -       200       - % Owner-occupied commercial     15,208       -       15,208       0.13 % Other mortgage     11,236       -       11,236       0.10 % Total   $ 66,275     $ -     $ 66,275       0.57 %   20     The following table summarizes the financial impacts of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023:         Three Months Ended September 30, 2023               Total Payment       Term Extensions     Deferral       (In months)     (In Thousands)   Commercial, financial and agricultural     3 to 12     $ -   Real estate - construction     -       -   Owner-occupied commercial     3       -   1-4 family mortgage     -       -   Other mortgage     -       -                         Nine Months Ended September 30, 2023               Total Payment       Term Extensions     Deferral       (In months)     (In Thousands)   Commercial, financial and agricultural     3 to 65     $ -   Real estate - construction     6       -   Owner-occupied commercial     3 to 60       49   1-4 family mortgage     3       -   Other mortgage     3 to 36       59     No loans modified on or after January 1, 2023, the date the Company adopted ASU 2022 - 02, were past due greater than 30 days or on non-accrual as of September 30, 2023.   As of September 30, 2023, the Company did not have any loans made to borrowers experiencing financial difficulty that were modified during the three and nine months of September 30, 2023 that subsequently defaulted. For purposes of this disclosure, default is defined as 90 days past due and still accruing or placement on nonaccrual status.   TDRs at December 31, 2022 and September 30, 2022 totaled $ 2.5 million and $ 2.0 million, respectively. The portion of those TDRs accruing interest at December 31, 2022 and September 30, 2022 totaled $ 431,000 and $ 236,000 , respectively. There were no modifications made to new TDRs or renewals of existing TDRs for the three and nine months ended September 30, 2022.There were  no  loans which were modified in the previous  twelve  months (i.e., the  twelve  months prior to default) that defaulted during the  three and nine months of September 30, 2022. For purposes of this disclosure, default is defined as  90  days past due and still accruing or placement on nonaccrual status.   NOTE 6 - LEASES   The Company leases space under non-cancelable operating leases for several of its banking offices and certain office equipment. The leases have remaining terms up to 10 years. At September 30, 2023, the Company had lease right-of-use assets and lease liabilities totaling $ 20.5 million and $ 21.4 million, respectively, compared to $ 18.8 million and $ 19.6 million, respectively, at December 31, 2022 which are reflected in other assets and other liabilities, respectively, in the Company’s Consolidated Balance Sheets.   Maturities of operating lease liabilities as of September 30, 2023 are as follows:       September 30, 2023       (In Thousands)   2023 (remaining)   $ 1,329   2024     4,637   2025     4,344   2026     3,504   2027     2,920   thereafter     6,710   Total lease payments     23,444   Less: imputed interest     ( 2,003 ) Present value of operating lease liabilities   $ 21,441     As of September 30, 2023, the weighted average remaining term of operating leases is 6.0 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.16 %.   21     Operating cash outflows related to leases were $ 1.8 million and $ 4.3 million for the three and nine months ended September 30, 2023, respectively, compared to $ 1.1 million and $ 3.1 million for the three and nine months ended September 30, 2022, respectively.   Lease costs during the three and nine months ended September 30, 2023 and September 30, 2022 were as follows (in thousands):       Three Months Ended September 30,       2023     2022   Operating lease cost   $ 1,784     $ 1,051   Short-term lease cost     -       22   Variable lease cost     212       153   Sublease income     ( 5 )     ( 5 ) Net lease cost   $ 1,991     $ 1,221                         Nine Months Ended September 30,       2023     2022   Operating lease cost   $ 4,291     $ 3,098   Short-term lease cost     -       47   Variable lease cost     597       452   Sublease income     ( 21 )     ( 34 ) Net lease cost   $ 4,867     $ 3,563       NOTE 7 - EMPLOYEE AND DIRECTOR BENEFITS   Stock Incentive Plan   The Company has a stock incentive plan as described below. The compensation cost that has been charged to earnings for the plan was approximately $ 929,000 and $ 2.7 million for the three and nine months ended September 30, 2023, respectively, and $ 804,000 and $ 2.4 million for the three and nine months ended September 30, 2022, respectively.   The Company’s 2009 Amended and Restated Stock Incentive Plan authorizes the grant of up to 5,550,000 shares and allows for the issuance of Stock Appreciation Rights, Restricted Stock, Stock Options, Non-stock Share Equivalents, Performance Shares or Performance Units. The plan allows for the grant of incentive stock options and non-qualified stock options, and option awards are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant. The maximum term of the options granted under the plan is ten years.   There have not been any grants of stock options since October of 2019.   The following table summarizes stock option activity during the nine months ended September 30, 2023 and 2022:                       Weighted                       Weighted     Average                       Average     Remaining     Aggregate               Exercise     Contractual     Intrinsic       Shares     Price     Term (years)     Value                               (In Thousands)   Nine Months Ended September 30, 2023:                                 Outstanding at January 1, 2023     280,000     $ 19.43       3.0     $ 14,088   Exercised     ( 87,700 )     12.04       0.8       3,520   Forfeited     ( 1,000 )     34.09       5.3       18   Outstanding at September 30, 2023     191,300     $ 22.65       3.4     $ 6,235                                     Exercisable at September 30, 2023     139,300     $ 17.12       1.7     $ 5,051                                     Nine Months Ended September 30, 2022:                                 Outstanding at January 1, 2022     353,250     $ 19.28       3.8     $ 23,525   Exercised     ( 65,500 )     16.42       2.3       4,164   Forfeited     ( 1,500 )     35.21       5.8       67   Outstanding at September 30, 2022     286,250     $ 19.51       3.4     $ 18,431                                     Exercisable at September 30, 2022     225,500     $ 14.89       2.3     $ 14,990     22     As of September 30, 2023, there was $ 77,000 of total unrecognized compensation cost related to non-vested stock options. The cost is expected to be recognized on the straight-line method over the next six months.   Restricted Stock and Performance Shares   The Company periodically grants restricted stock awards that vest upon time-based 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 September 30, 2023, there was $ 4.6 million of total unrecognized compensation cost related to non-vested time-based restricted stock. The cost is expected to be recognized evenly over the remaining 2.0 years of the restricted stock’s vesting period.   The Company periodically grants performance shares that give plan participants the opportunity to earn between 0 % and 150 % of the number of performance shares granted based on achieving certain market conditions. 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 the performance shares is determined using a Monte Carlo simulation model on the grant date. As of September 30, 2023, there was $ 895,000 of total unrecognized compensation cost related to non-vested performance shares. As of September 30, 2023, non-vested performance shares had a weighted average remaining time to vest of 1.3 years.       Restricted Stock     Performance Shares       Shares     Weighted Average Grant Date Fair Value     Shares     Weighted Average Grant Date Fair Value   Nine Months Ended September 30, 2023:                                 Non-vested at January 1, 2023     141,580     $ 56.39       23,852     $ 54.16   Granted     49,415       60.29       8,091       70.29   Vested     ( 31,492 )     52.22       -       -   Forfeited     ( 11,733 )     64.78       -       -   Non-vested at September 30, 2023     147,770     $ 57.92       31,943     $ 58.25                                     Nine Months Ended September 30, 2022:                                 Non-vested at January 1, 2022     127,602     $ 42.27       12,437     $ 37.05   Granted     52,819       83.33       11,415       72.81   Vested     ( 26,563 )     43.51       -       -   Forfeited     ( 8,206 )     61.70       -       -   Non-vested at September 30, 2022     145,652     $ 55.84       23,852     $ 54.16       NOTE 8 - DERIVATIVES   The Company periodically enters into derivative contracts to manage exposure to movements in interest rates. The Company purchased an interest rate cap in May of 2020 to limit exposures to increases in interest rates. The interest rate cap was not designated as a hedging instrument. The interest rate cap had an original term of 3 years, a notional amount of $ 300 million and was tied to the one -month LIBOR rate with a strike rate of 0.50 %. The fair value of the interest rate cap was carried on the Consolidated Balance Sheet in other assets and the change in fair value was recognized in noninterest income each quarter. The interest rate cap contract expired May 4, 2023.   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 with customers 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 September 30, 2023 and December 31, 2022 were not material.     NOTE 9 – RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS   In March 2022, the FASB issued ASU 2022 - 02 . The amendments eliminate the accounting guidance for TDR recognition in Subtopic 310 - 40, Receivables – Trouble Debt Restructurings by Creditors by entities that have adopted ASU 2016 - 13, Financial Instruments-Credit Losses (Topic 326 ): Measurement of Credit Losses on Financial Instruments. For public business entities, the amendments 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. Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 326 - 20 - 50 - 6, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The Company adopted ASU 2022 - 02 effective January 1, 2023 on a prospective basis. Adoption of ASU 2022 - 02 did not have a material impact on the Company’s consolidated financial statements other than providing the new required disclosures.   23       NOTE 10 - RECENT ACCOUNTING PRONOUNCEMENTS   In March 2023, the FASB issued ASU 2023 - 02, Investments-Equity Method and Joint Ventures (Topic 323 ): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. These amendments allow entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. The ASU responds to stakeholder feedback that the proportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for the purpose of receiving income tax credits and other income tax benefits. ASU 2023 - 02 is effective for public entities for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period. The Company is assessing its tax credit investments for whether they qualify for proportional amortization treatment and plans to adopt the amendments soon after. The Company does not currently believe the amendments will have a material impact on its consolidated financial statements.   NOTE 11 - 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 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 derived from loans individually evaluated  where the value of such loans is deemed to be less than the unpaid balance. The range of fair value adjustments and weighted average adjustment as of September 30, 2023 was 0 % to 65 % and 25 %, respectively. The range of fair value adjustments and weighted average adjustment as of December 31, 2022 was 0 % to 82 % and 19.5 % 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 $ 7.2 million and $ 13.5 million during the three and nine months ended September 30, 2023, respectively, and $ 1.4 million and $ 3.2 million during the three and nine months ended September 30, 2022, respectively.   24     Other Real Estate Owned . 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 September 30, 2023 was 26 % to 100 % and 42 %, respectively. The range of fair value adjustments and weighted average adjustment as of December 31, 2022 was 0 % to 100 % and 53.3 %, respectively. These measurements are classified as Level 3 within the valuation hierarchy. A loss on the sale and write-downs of OREO and repossessed assets of $ 33,000 and $ 28,000 was recognized for the three and nine months ended September 30, 2023, respectively, and $ 232,000 for the nine months ended September 30, 2022. 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 was one  residential real estate loan with a balance of $ 95,000  foreclosed and classified as OREO as of  September 30, 2023, compared to two residential real estate loan foreclosures for $ 248,000 as of December 31, 2022.   Ten residential real estate loans totaling $ 1.8 million were in the process of being foreclosed as of September 30, 2023.  There were no residential real estate loans that were in the process of being foreclosed as of December 31, 2022.   The following table presents the Company’s financial assets carried at fair value on a recurring basis as of September 30, 2023 and December 31, 2022. There were no liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022.       Fair Value Measurements at September 30, 2023 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   $ 280,718     $ -     $ -     $ 280,718   Mortgage-backed securities     -       215,241       -       215,241   State and municipal securities     -       11,193       -       11,193   Corporate debt     -       320,790       6,860       327,650   Total available-for-sale debt securities     280,718       547,224       6,860       834,802   Total assets at fair value   $ 280,718     $ 547,224     $ 6,860     $ 834,802                                         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     25     The following table presents the Company’s financial assets carried at fair value on a nonrecurring basis as of September 30, 2023 and December 31, 2022:       Fair Value Measurements at September 30, 2023               Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Unobservable Inputs (Level 3)     Total   Assets Measured on a Nonrecurring Basis:   (In Thousands)   Loans individually evaluated   $ -     $ -     $ 69,570     $ 69,570   Other real estate owned and repossessed assets     -       -       690       690   Total assets at fair value   $ -     $ -     $ 70,260     $ 70,260                                         Fair Value Measurements at December 31, 2022               Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Unobservable 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     In the case of the investment securities portfolio, the Company monitors the portfolio to ascertain when transfers between levels have been affected.  The nature of the remaining assets and liabilities is such that transfers in and out of any level are expected to be rare.  For the nine months ended September 30, 2023, there was one transfer from Level 3 to Level 2.   The table below includes a rollforward of the balance sheet amounts for the three and nine months ended September 30, 2023 and September 30, 2022 ( 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 Three Months Ended September 30,     For the Nine Months Ended September 30,       2023     2022     2023     2022       Available-for-sale Securities     Available-for-sale Securities     Available-for-sale Securities     Available-for-sale Securities       (In Thousands)   Fair value, beginning of period   $ 6,860     $ 6,000     $ 10,860     $ 16,992   Transfers into Level 3     -       -       -       -   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     -       -       160       ( 805 ) Purchases     -       -       -       -   Transfers out of Level 3     -       -       ( 4,160 )     ( 10,187 ) Fair value, end of period   $ 6,860     $ 6,000     $ 6,860     $ 6,000     26     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.   The estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis as of September 30, 2023 and December 31, 2022 were as follows:       September 30, 2023     December 31, 2022       Carrying             Carrying               Amount     Fair Value     Amount     Fair Value       (In Thousands)   Financial Assets:                                 Level 1 Inputs:                                 Cash and cash equivalents   $ 1,974,074     $ 1,974,074     $ 814,538     $ 814,538   Held to maturity U.S. Treasury securities     558,196       523,182       507,151       470,954                                     Level 2 Inputs:                                 Federal funds sold     91,035       91,035       1,515       1,515   Held to maturity debt securities     485,453       409,574       526,720       464,749   Mortgage loans held for sale     6,333       6,281       1,607       1,604   Restricted equity securities     10,226       10,226       7,734       7,734                                     Level 3 Inputs:                                 Held to maturity debt securities     250       250       250       250   Loans, net     11,488,883       11,069,141       11,541,671       11,265,517                                     Financial Liabilities:                                 Level 2 Inputs:                                 Deposits   $ 13,142,376     $ 13,128,874     $ 11,546,805     $ 11,529,647   Federal funds purchased     1,370,289       1,370,289       1,618,798       1,618,798   Other borrowings     64,751       57,829       64,726       57,101     ITEM 2. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   The following discussion and analysis is designed to provide a better understanding of various factors relating to the results of operations and financial condition of ServisFirst Bancshares, Inc. (the “Company”) and its wholly-owned subsidiary, ServisFirst Bank. This discussion is intended to supplement and highlight information contained in the accompanying unaudited consolidated financial statements as of and for the three and nine months ended September 30, 2023 and September 30, 2022.   Forward-Looking Statements   Statements in this document that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 27A of the Securities Act of 1933. The words “believe,” “expect,” “anticipate,” “project,” “plan,” “intend,” “will,” “could,” “would,” “might” and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. The Company cautions that such forward-looking statements, wherever they occur in this quarterly report or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Company’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various factors that could affect the accuracy of such forward-looking statements, including, but not limited to: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes as a result of our reclassification as a large financial institution by the FDIC; changes in our loan portfolio and the deposit base; credit issues associated with the efficacy of return to office policies; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, Federal Reserve policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; computer hacking or cyber-attacks resulting in unauthorized access to confidential or proprietary information; substantial, unexpected or prolonged changes in the level or cost of liquidity; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornados, in our geographic markets; and increased competition from both banks and non-bank financial institutions. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward Looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q for fiscal year 2023 and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made. The Company assumes no obligation to update or revise any forward-looking statements that are made from time to time.   27     Business   We are a bank holding company under the Bank Holding Company Act of 1956 and are headquartered in Birmingham, Alabama. Our wholly-owned subsidiary, ServisFirst Bank, an Alabama banking corporation, provides commercial banking services through full-service banking offices located in Alabama, Florida, Georgia, North and South Carolina, Tennessee, and Virginia. We also operate loan production offices in Florida, North Carolina, and Virginia. Through the Bank, we originate commercial, consumer and other loans and accept deposits, provide electronic banking services, such as online and mobile banking, including remote deposit capture, deliver treasury and cash management services and provide correspondent banking services to other financial institutions.   Our principal business is to accept deposits from the public and to make loans and other investments. Our principal sources of funds for loans and investments are demand, time, savings, and other deposits. Our principal sources of income are interest and fees collected on loans, interest and dividends collected on other investments and service charges. Our principal expenses are interest paid on savings and other deposits, interest paid on our other borrowings, employee compensation, office expenses and other overhead expenses.   Third quarter highlights     ● Diluted earnings per common share of $0.98 for the third quarter of 2023, a decrease of 16%, from the third quarter 2022.   ● Average loans of $11.6 billion for the third quarter of 2023, an increase of $643.1 million, or 6%, from a year ago.   ● Average deposits of $12.7 billion for the third quarter of 2023, an increase of $1.1 billion, or 10%, from a year ago.   ● Net interest income of $99.7 million for the third quarter of 2023, a decrease of $26.7 million, or 21%, from the third quarter of 2022.   ● Net interest margin of 2.64% for the third quarter of 2023 decreased 100 bps from 3.64% in the third quarter of 2022. The decrease primarily resulted from increases in rates paid on interest-bearing deposits.   Overview   As of September 30, 2023, we had consolidated total assets of $16.0 billion, an increase of $1.4 billion, or 9.9%, from total assets of $14.6 billion at December 31, 2022. Total loans were $11.6 billion at September 30, 2023, a decrease of $46.8 million, or 0.4%, from $11.7 billion at December 31, 2022. Total deposits were $13.1 billion at September 30, 2023, an increase of $1.6 billion, or 13.8%, from $11.5 billion at December 31, 2022.   Net income available to common stockholders for the three months ended September 30, 2023 was $53.3 million, a decrease of $10.7 million, or 16.7%, from $64.0 million for the three months ended September 30, 2022.  Basic and diluted earnings per common share were both $0.98 for the three months ended September 30, 2023, compared to $1.18 and $1.17, respectively, in the corresponding period in 2022.    Net income available to common stockholders for the nine months ended September 30, 2023 was $164.7 million, a decrease of $19.0 million, or 10.3%, from $183.7 million for the corresponding period in 2022. Basic and diluted earnings per common share were $3.03 and $3.02, respectively, for the nine months ended September 30, 2023, compared to $3.38 and $3.37, respectively, for the corresponding period in 2022.   28     Performance Ratios   The following table presents selected ratios of our results of operations for the three and nine months ended September 30, 2023, and 2022.       Three Months Ended September 30,     Nine Months Ended September 30,       2023     2022     2023     2022   Return on average assets     1.37 %     1.77 %     1.50 %     1.64 % Return on average common stockholders' equity     15.12 %     20.49 %     16.23 %     20.44 % Dividend payout ratio     28.63 %     19.07 %     28.63 %     20.28 % Net interest margin (1)     2.64 %     3.64 %     2.90 %     3.26 % Efficiency ratio (2)     38.64 %     31.54 %     36.05 %     31.93 % Average stockholders' equity to average total assets     9.07 %     8.61 %     9.22 %     8.02 %                                   (1) Net interest margin is the net yield on interest earning assets and is the difference between the interest yield earned on interest-earning assets and interest rate paid on interest-bearing liabilities, divided by average earning assets.   (2) Efficiency ratio is the result of noninterest expense divided by the sum of net interest income and noninterest income.     Financial Condition   Cash and Cash Equivalents   At September 30, 2023, we had $91.0 million in federal funds sold, compared to $1.5 million at December 31, 2022. We also maintain balances at the Federal Reserve Bank of Atlanta, which earn interest. At September 30, 2023, we had $1.85 billion in balances at the Federal Reserve, compared to $693.8 million at December 31, 2022.   Investment Securities   Debt securities available for sale totaled $834.8 million at September 30, 2023 and $644.8 million at December 31, 2022. Investment securities held to maturity totaled $1.04 billion at September 30, 2023 and $1.03 billion at December 31, 2022. We had paydowns of $62.6 million on mortgage-backed securities and government agencies, maturities of $374.0 million on municipal bonds, corporate securities and treasury securities, and calls of $13.0 million on U.S. government agencies and municipal securities during the nine months ended September 30, 2023. We recognized a $6.2 million loss on the sale of available for sale debt securities for the nine months ended September 30, 2022. We sold sixteen debt securities available for sale for $75.0 million that were yielding less than 1.00%. We purchased $675.5 million in U.S. Treasuries during the nine months ended September 30, 2023, compared to $361.6 million in U.S. Treasuries, $286.7 million in mortgage-backed securities, and $76.4 million in corporate securities during the nine months ended September 30, 2022.  For a tabular presentation of debt securities available for sale and held to maturity at September 30, 2023 and December 31, 2022, see “Note 4 – Securities” in our Notes to Consolidated Financial Statements.   The objective of our investment policy is to invest funds not otherwise needed to meet our loan demand to earn the maximum return, yet still maintain sufficient liquidity to meet fluctuations in our loan demand and deposit structure. In doing so, we balance the market and credit risks against the potential investment return, make investments compatible with the pledge requirements of any deposits of public funds, maintain compliance with regulatory investment requirements, and assist certain public entities with their financial needs. The investment committee has full authority over the investment portfolio and makes decisions on purchases and sales of securities. The entire portfolio, along with all investment transactions occurring since the previous board of directors meeting, is reviewed by the board at each monthly meeting. The investment policy allows portfolio holdings to include short-term securities purchased to provide us with needed liquidity and longer-term securities purchased to generate level income for us over periods of interest rate fluctuations.   All investment securities in an unrealized loss position as of September 30, 2023 continue to perform as scheduled. We have evaluated the securities and have determined that the decline in fair value, relative to its amortized cost, is not due to credit-related factors. In addition, we have the ability to hold these securities within the portfolio until maturity or until the value recovers, and we believe that it is not likely that we will be required to sell these securities prior to recovery. We continue to monitor all of our securities with a high degree of scrutiny. There can be no assurance that we will not conclude in future periods that conditions existing at that time indicate some or all of its securities may be sold or would require a charge to earnings as a provision for credit losses in such periods.   29     The Company does not invest in collateralized debt obligations (“CDOs”). As of September 30, 2023, we had $385.7 million of bank holding company subordinated notes. If rated, all such bonds were rated BBB or better by Kroll Bond Rating Agency at the time of our initial investment. All other corporate bonds had a Standard and Poor’s or Moody’s rating of A-1 or better when purchased. The total investment portfolio has a combined average credit rating of AA as of September 30, 2023.   The carrying value of investment securities pledged to secure public funds on deposit and for other purposes as required by law was $1.45 billion and $789.3 million as of September 30, 2023 and December 31, 2022, respectively. The increase in pledged investments is due to increased public fund balances during the third quarter of 2023.   Loans   We had total loans of $11.6 billion at September 30, 2023, a decrease of $46.8 million, or 0.4%, compared to $11.7 billion at December 31, 2022.   Asset Quality   The Company assesses the adequacy of its allowance for credit losses ("ACL") at the end of each calendar quarter. The level of ACL is based on the Company’s evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers’ ability to repay a loan, the estimated value of any underlying collateral, composition of the loan portfolio and other relevant factors. The ACL is increased by a provision for credit losses, which is charged to expense, and reduced by charge-offs, net of recoveries. The ACL is believed adequate to absorb all expected future losses to be recognized over the contractual life of the loans in the portfolio.   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. See “Note 1 – General” and “Note 5 – Loans” in the Notes to Consolidated Financial Statements included in Item 1. Consolidated Financial Statements elsewhere in this report.   The expected 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.   Expected 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 TDRs. Individual allocations of the ACL for credit losses are estimated by using 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.       As of and for the Three Months Ended     As of and for the Nine Months Ended       September 30,     September 30,       2023     2022     2023     2022       (Dollars in thousands)   Total loans outstanding, net of unearned income   $ 11,641,130     $ 11,278,614     $ 11,641,130     $ 11,278,614   Average loans outstanding, net of unearned income   $ 11,563,026     $ 10,919,957     $ 11,604,264     $ 10,256,572   Allowance for credit losses at beginning of period     152,272       128,387       146,297       116,660   Charge-offs:                                 Commercial, financial and agricultural loans     4,783       2,902       10,398       7,143   Real estate - construction     19       -       19       -   Real estate - mortgage     -       170       157       220   Consumer loans     341       261       842       459   Total charge-offs     5,143       3,333       11,416       7,822   Recoveries:                                 Commercial, financial and agricultural loans     825       297       2,187       1,619   Real estate - construction     -       -       3       -   Real estate - mortgage     -       -       -       -   Consumer loans     11       12       43       37   Total recoveries     836       309       2,233       1,656   Net charge-offs     4,307       3,024       9,184       6,166   Provision for credit losses     4,282       15,604       15,133       30,473   Allowance for credit losses at period end   $ 152,247     $ 140,967     $ 152,247     $ 140,967   Allowance for credit losses to period end loans     1.31 %     1.25 %     1.31 %     1.25 % Net charge-offs to average loans     0.15 %     0.11 %     0.11 %     0.08 %   30                 Percentage of loans         ACL     in each category   September 30, 2023   Amount     to total loans       (In Thousands)   Commercial, financial and agricultural   $ 45,961       33.22 % Real estate - construction     38,023       10.08 % Real estate - mortgage     66,274       55.97 % Consumer     1,989       0.73 % Total   $ 152,247       100.00 %                               Percentage of loans         ACL     in each category   December 31, 2022   Amount     to total loans       (In Thousands)   Commercial, financial and agricultural   $ 42,830       31.30 % Real estate - construction     42,889       11.57 % Real estate - mortgage     58,652       56.43 % Consumer     1,926       0.70 % Total   $ 146,297       100.00 %   Nonperforming Assets   Total nonperforming loans, which include nonaccrual loans and loans 90 or more days past due and still accruing, increased to $22.5 million at September 30, 2023, compared to $17.8 million at December 31, 2022. Of this total, nonaccrual loans of $20.9 million at September 30, 2023 represented a net increase of $8.5 million from nonaccrual loans at December 31, 2022.  Excluding credit card accounts, there were six loans 90 or more days past due and still accruing totaling $1.5 million at September 30, 2023, compared to one loan totaling $4.6 million at December 31, 2022. Loans made to borrowers experiencing financial difficulty that were modified during the three months ended September 30, 2023 were $25.6 million. TDRs at December 31, 2022, and September 30, 2022 were $2.5 million and $2.4 million, respectively.   31     The following table details our nonperforming assets at September 30, 2023 and December 31, 2022:       September 30, 2023     December 31, 2022               Number of             Number of       Balance     Loans     Balance     Loans       (Dollar Amounts In Thousands)   Nonaccrual loans:                                 Commercial, financial and agricultural   $ 8,650       37     $ 7,108       18   Real estate - construction     200       1       -       -   Real estate - mortgage:                                 Owner-occupied commercial     7,006       13       3,312       3   1-4 family mortgage     4,549       38       1,524       16   Other mortgage     506       2       506       2   Total real estate - mortgage     12,061       53       5,342       21   Consumer     -       -       -       -   Total Nonaccrual loans:   $ 20,911       91     $ 12,450       39                                     90+ days past due and accruing:                                 Commercial, financial and agricultural   $ 24       3     $ 195       26   Real estate - construction     -       -       -       -   Real estate - mortgage:                                 Owner-occupied commercial     -       -       -       -   1-4 family mortgage     1,495       6       594       5   Other mortgage     -       -       4,512       1   Total real estate - mortgage     1,495       6       5,106       6   Consumer     173       -       90       44   Total 90+ days past due and accruing:   $ 1,692       9     $ 5,391       76                                     Total Nonperforming Loans:   $ 22,603       100     $ 17,841       115                                     Plus: Other real estate owned and repossessions     690       4       248       2   Total Nonperforming Assets   $ 23,293       104     $ 18,089       117                                     Restructured accruing loans:                                 Commercial, financial and agricultural   $ -       -     $ 2,480       5   Real estate - construction     -       -       -       -   Real estate - mortgage:                                 Owner-occupied commercial     -       -       -       -   1-4 family mortgage     -       -       -       -   Other mortgage     -       -       -       -   Total real estate - mortgage     -       -       -       -   Consumer     -       -       -       -   Total restructured accruing loans:   $ -       -     $ 2,480       5                                     Total Nonperforming assets and restructured accruing loans   $ 23,293       104     $ 20,569       122                                     Ratios:                                 Nonperforming loans to total loans     0.19 %             0.15 %         Nonperforming assets to total loans plus other real estate owned and repossessions     0.20 %             0.15 %         Nonperforming assets plus restructured accruing loans to total loans plus other real estate owned and repossessions     0.20 %             0.18 %           OREO and repossessed assets increased to $690,000 at September 30, 2023, compared to $248,000 at December 31, 2022. The following table summarizes OREO and repossessed asset activity for the nine months ended September 30, 2023 and 2022:       Nine Months Ended September 30,       2023     2022       (In thousands)   Balance at beginning of period   $ 248     $ 1,208   Transfers from loans and capitalized expenses     628       1,045   Proceeds from sales     (158 )     (1,240 ) Internally financed sales     -       -   Write-downs / net gain (loss) on sales     (28 )     232   Balance at end of period   $ 690     $ 1,245     The balance of nonperforming assets can fluctuate due to changes in economic conditions. We have established a policy to discontinue accruing interest on a loan (i.e., place the loan on nonaccrual status) after it has become 90 days delinquent as to payment of principal or interest, unless the loan is considered to be well-collateralized and is actively in the process of collection. In addition, a loan will be placed on nonaccrual status before it becomes 90 days delinquent if management believes that the collection of interest is not expected. Interest previously accrued but uncollected on such loans is reversed and charged against current income when the receivable is determined to be uncollectible. Interest income on nonaccrual loans is recognized only as received. If we believe that a loan will not be collected in full, we will increase the allowance for credit losses to reflect management’s estimate of any potential exposure or loss. Generally, payments received on nonaccrual loans are applied directly to principal.   32     In keeping with guidance from regulators, the Company continues to work with COVID-19 affected borrowers to defer their payments and interest. While interest continues to accrue to income, through normal U.S. GAAP accounting, should eventual credit losses on these deferred payments emerge, the related loans would be placed on nonaccrual status and interest income accrued would be reversed. In such a scenario, interest income in future periods could be negatively impacted. As of September 30, 2023, the Company carries $2.3 million of accrued interest income on deferrals made to COVID-19 affected borrowers compared to $2.4 million at December 31, 2022. At this time, the Company is unable to project the materiality of such an impact on future deferrals to COVID-19 affected borrowers but recognizes the breadth of the economic impact may affect its borrowers’ ability to repay in future periods.   Deposits   We rely on increasing our deposit base to fund loan and other asset growth. Each of our markets is highly competitive. We compete for local deposits by offering attractive products with competitive rates. We expect to have a higher average cost of funds for local deposits than competitor banks due to our lack of an extensive branch network. Our management’s strategy is to offset the higher cost of funding with a lower level of operating expense and firm pricing discipline for loan products. We have promoted electronic banking services by providing them without charge and by offering in-bank customer training. Total deposits were $13.14 billion at September 30, 2023, an increase of $1.60 billion, or 13.8%, from $11.55 billion at December 31, 2022. The bulk of the increase in our total deposits were in interest-bearing deposits, money market accounts and time deposits. We anticipate long-term sustainable growth in deposits through continued development of market share in our less mature markets and through organic growth in our mature markets.   For amounts and rates of our deposits by category, see the table “Average Balance Sheets and Net Interest Analysis on a Fully Taxable-Equivalent Basis” under the subheading “Net Interest Income.”   The following table summarizes balances of our deposits and the percentage of each type to the total at September 30, 2023 and December 31, 2022:       September 30, 2023     December 31, 2022   Noninterest-bearing demand   $ 2,621,072       19.94 %   $ 3,321,347       28.76 % Interest-bearing demand     2,147,355       16.34 %     1,861,496       16.12 % Money market     7,146,835       54.38 %     5,362,705       46.44 % Savings     108,677       0.83 %     138,450       1.20 % Time deposits , $250,000 and under     372,963       2.84 %     239,772       2.08 % Time deposits, over $250,000     745,474       5.67 %     573,035       4.96 % Brokered time deposits     -       - %     50,000       0.43 %     $ 13,142,376       100.00 %   $ 11,546,805       100.00 %   As of September 30, 2023, and December 31, 2022, we estimate that we had approximately $8.5 billion and $7.7 billion in uninsured deposits, respectively. These uninsured deposits represent the portion of deposit accounts that exceed FDIC insurance limits. Included in our uninsured deposits on September 30, 2023, and December 31, 2022, we estimate that we had approximately $2.1 billion and $758 million, respectively, in public funds. While public fund balances that exceed FDIC limits are uninsured deposits, these deposits are collateralized by securities.     The following table presents the maturities of our time deposits that exceed FDIC insurance limits as of September 30, 2023.       Portion of time deposits in excess of insurance limit       September 30, 2023   Uninsured time deposits with a maturity of:   (In Thousands)   3 months or less   $ 59,178   Over 3 through 6 months   $ 108,947   Over 6 months through 12 months     145,788   Over 12 months     80,744   Total   $ 394,657     The uninsured deposit data for 2023 and 2022 reflect the deposit insurance impact of “combined ownership segregation” of escrow and other accounts at an aggregate level but do not reflect an evaluation of all the account styling distinctions that would determine the availability of deposit insurance to individual accounts based on FDIC regulations.   33     Other Borrowings   Our borrowings consist of federal funds purchased and subordinated notes payable. We had $1.37 billion and $1.62 billion at September 30, 2023 and December 31, 2022, respectively, in federal funds purchased from correspondent banks that are clients of our correspondent banking unit. The average rate paid on these borrowings was 5.13% for the quarter ended September 30, 2023. Other borrowings consist of the following:     ● $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.   ● $30.0 million of 4.5% Subordinated Notes due November 8, 2027, which were issued in a private placement in November 2017 and pay interest semi-annually.   Liquidity   Liquidity is defined as our ability to generate sufficient cash to fund current loan demand, deposit withdrawals, and other cash demands and disbursement needs, and otherwise to operate on an ongoing basis.   The retention of existing deposits and attraction of new deposit sources through new and existing customers is critical to our liquidity position. If our liquidity were to decline due to a run-off in deposits, we have procedures that provide for certain actions under varying liquidity conditions. These actions include borrowing from existing correspondent banks, selling or participating loans, and curtailing loan commitments and funding. At September 30, 2023, liquid assets, which are represented by cash and due from banks, federal funds sold and unpledged available-for-sale securities, totaled $2.48 billion. The Bank had loans pledged to the FHLB which provided approximately $1.71 billion in available funding. The Bank’s policy limits on brokered deposits would allow for up to $3.6 billion in available funding for brokered deposits. At September 30, 2023, the Bank had borrowing availability of approximately $931.0 million in unused federal funds lines of credit with regional banks, subject to certain restrictions and collateral requirements.  We believe these sources of funding are adequate to meet our anticipated funding needs.   Our management meets on a quarterly basis to review sources and uses of funding to determine the appropriate strategy to ensure an appropriate level of liquidity. At the current time, our long-term liquidity needs primarily relate to funds required to support loan originations and commitments and deposit withdrawals. Our regular sources of funding are from the growth of our deposit base, correspondent banking relationships and related federal funds purchased, repayment of principal and interest on loans, the sale of loans and the renewal of time deposits. In addition, we have issued debt as described above under “Other Borrowings”. We believe these sources of funding are adequate to meet both our immediate (within the next 12 months) and our longer term anticipated funding needs. However, we may need additional funding to maintain our current growth rate into the future.   We are subject to general FDIC guidelines that require a minimum level of liquidity. Management believes our liquidity ratios meet or exceed these guidelines.   The following table illustrates, during the periods presented, the mix of our funding sources and the assets in which those funds are invested as a percentage of our average total assets for the period indicated. Average assets totaled $15.43 billion and $14.71 billion for the three and nine months ended September 30, 2023.       For the Three Months Ended September 30,     For the Nine Months Ended September 30,       2023     2022     2023     2022   Sources of Funds:                                 Deposits:                                 Non-interest-bearing     20.1 %     30.6 %     19.7 %     31.6 % Interest-bearing     60.7       49.4       61.2       49.0   Federal funds purchased     8.3       10.4       8.6       10.5   Long term debt and other borrowings     0.7       0.4       0.6       0.4   Other liabilities     0.5       0.4       0.4       0.4   Equity capital     9.8       8.8       9.5       8.1   Total sources     100.0 %     100.0 %     100.0 %     100.0 %                                   Uses of Funds:                                 Loans     75.0 %     75.9 %     79.0 %     69.1 % Securities     13.2       12.5       12.5       11.5   Interest-bearing balances with banks     8.4       6.6       5.2       15.5   Federal funds sold     0.5       0.7       0.3       0.3   Other assets     2.9       4.2       3.0       3.6   Total uses     100.0 %     99.9 %     100.0 %     100.0 %   34     Capital Adequacy   Total stockholders’ equity attributable to us at September 30, 2023 was $1.40 billion, or 9.04% of total assets. At December 31, 2022, total stockholders’ equity attributable to us was $1.30 billion, or 8.89% of total assets.   As of September 30, 2023, our most recent notification from the FDIC categorized us as well-capitalized under the regulatory framework for prompt corrective action. To remain categorized as well-capitalized, we must maintain minimum common equity Tier 1, Tier 1 risk-based, total risk-based, and Tier 1 leverage ratios as disclosed in the table below. Our management believes that we are well-capitalized under the prompt corrective action provisions as of September 30, 2023.   The following table sets forth (i) the capital ratios required by the FDIC and the Alabama Banking Department’s leverage ratio requirement and (ii) our actual ratios, not including the applicable 2.5% capital conservation buffer, of capital to total regulatory or risk-weighted assets, as of September 30, 2023, December 31, 2022 and September 30, 2022:                                       To Be Well Capitalized                       For Capital Adequacy     Under Prompt Corrective       Actual     Purposes     Action Provisions       Amount     Ratio     Amount     Ratio     Amount     Ratio   As of September 30, 2023   (Dollars in Thousands)   CET 1 Capital to Risk-Weighted Assets:                                                 Consolidated   $ 1,447,107       10.69 %   $ 609,385       4.50 %     N/A       N/A   ServisFirst Bank     1,508,380       11.14 %     609,345       4.50 %   $ 880,164       6.50 % Tier 1 Capital to Risk-Weighted Assets:                                                 Consolidated     1,447,607       10.69 %     812,514       6.00 %     N/A       N/A   ServisFirst Bank     1,508,880       11.14 %     812,459       6.00 %     1,083,279       8.00 % Total Capital to Risk-Weighted Assets:                                                 Consolidated     1,659,180       12.25 %     1,083,352       8.00 %     N/A       N/A   ServisFirst Bank     1,661,702       12.27 %     1,083,279       8.00 %     1,354,099       10.00 % Tier 1 Capital to Average Assets:                                                 Consolidated     1,447,607       9.35 %     619,043       4.00 %     N/A       N/A   ServisFirst Bank     1,508,880       9.75 %     619,041       4.00 %     773,801       5.00 %                                                   As of December 31, 2022                                                 CET 1 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 1 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 1 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 September 30, 2022                                                 CET 1 Capital to Risk-Weighted Assets:                                                 Consolidated   $ 1,272,564       9.42 %   $ 607,684       4.50 %     N/A       N/A   ServisFirst Bank     1,332,933       9.87 %     607,645       4.50 %   $ 877,710       6.50 % Tier 1 Capital to Risk-Weighted Assets:                                                 Consolidated     1,273,064       9.43 %     810,245       6.00 %     N/A       N/A   ServisFirst Bank     1,333,433       9.87 %     810,194       6.00 %     1,080,259       8.00 % Total Capital to Risk-Weighted Assets:                                                 Consolidated     1,480,681       10.96 %     1,080,326       8.00 %     N/A       N/A   ServisFirst Bank     1,476,329       10.93 %     1,080,259       8.00 %     1,350,323       10.00 % Tier 1 Capital to Average Assets:                                                 Consolidated     1,273,064       8.84 %     576,098       4.00 %     N/A       N/A   ServisFirst Bank     1,333,433       9.26 %     576,009       4.00 %     720,011       5.00 %   35     We are a legal entity separate and distinct from the Bank. Our principal source of cash flow, including cash flow to pay dividends to our stockholders, are dividends the Bank pays to us as the Bank’s sole stockholder. Statutory and regulatory limitations apply to the Bank’s payment of dividends to us as well to our payment of dividends to our stockholders. The requirement that a bank holding company must serve as a source of strength to its subsidiary banks also results in the position of the Federal Reserve that a bank holding company should not maintain a level of cash dividends to its stockholders that places undue pressure on the capital of its bank subsidiaries or that can be funded only through additional borrowings or other arrangements that may undermine the bank holding company’s ability to serve as a source of strength. Our ability to pay dividends is also subject to the provisions of Delaware corporate law.   The Alabama Banking Department also regulates the Bank’s dividend payments. Under Alabama law, a state-chartered bank may not pay a dividend in excess of 90% of its net earnings until the Bank’s surplus is equal to at least 20% of its capital (our Bank’s surplus currently exceeds 20% of its capital). Moreover, our Bank is also required by Alabama law to obtain the prior approval of the Superintendent of Banks (“Superintendent”) for its payment of dividends if the total of all dividends declared by the Bank in any calendar year will exceed the total of (i) the Bank’s net earnings (as defined by statute) for that year, plus (ii) its retained net earnings for the preceding two years, less any required transfers to surplus. In addition, no dividends, withdrawals or transfers may be made from the Bank’s surplus without the prior written approval of the Superintendent.   The Bank’s payment of dividends may also be affected or limited by other factors, such as the requirement to maintain adequate capital above regulatory guidelines. The federal banking agencies have indicated that paying dividends that deplete a depository institution’s capital base to an inadequate level would be an unsafe and unsound banking practice. Under the Federal Deposit Insurance Corporation Improvement Act of 1991, a depository institution may not pay any dividends if payment would cause it to become undercapitalized or if it already is undercapitalized. Moreover, the federal agencies have issued policy statements that provide that bank holding companies and insured banks should generally only pay dividends out of current operating earnings. If, in the opinion of the federal banking regulators, the Bank were engaged in or about to engage in an unsafe or unsound practice, the federal banking regulators could require, after notice and a hearing, that the Bank stop or refrain from engaging in the questioned practice.   Commitments and Contingencies   In the normal course of business, we are a party to financial instruments with off-balance sheet risk to meet the financing needs of our customers. These financial instruments include commitments to extend credit beyond current fundings, credit card arrangements, standby letters of credit, and financial guarantees. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in our balance sheet. The contract or notional amounts of those instruments reflect the extent of involvement we have in those particular financial arrangements. All such credit arrangements bear interest at variable rates.   Our exposure to credit loss in the event of non-performance by the other party to such financial instrument for commitments to extend credit, credit card arrangements and standby letters of credit is represented by the contractual or notional amount of these instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments.   As part of our mortgage operations, we originate and sell certain loans to investors in the secondary market. We continue to experience a manageable level of investor repurchase demands. For loans sold, we have an obligation to either repurchase the outstanding principal balance of a loan or make the purchaser whole for the economic benefits of a loan if it is determined that the loans sold were in violation of representations and warranties made by the Bank at the time of the sale. Representations and warranties typically include those made regarding loans that had missing or insufficient file documentation or loans obtained through fraud by borrowers or other third parties such as appraisers.   Financial instruments whose contract amounts represent credit risk at September 30, 2023 are as follows:       September 30, 2023       (In Thousands)   Commitments to extend credit   $ 3,511,615   Credit card arrangements     407,442   Standby letters of credit     80,838       $ 3,999,895     36     Commitments to extend credit beyond current funded amounts are agreements to lend to a customer so long as there is no violation of any condition established in the applicable loan agreement. Such commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by us upon extension of credit is based on our management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.   Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. All letters of credit are due within one year or less of the original commitment date. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.   Federal funds lines of credit are uncommitted lines issued to downstream correspondent banks for the purpose of providing liquidity to them. The lines are unsecured, and we have no obligation to sell federal funds to the correspondent, nor does the correspondent have any obligation to request or accept purchases of federal funds from us.   Results of Operations   Summary of Net Income   Net income and net income available to common stockholders for the three months ended September 30, 2023 was $53.3 million compared to net income and net income available to common stockholders of $64.0 million for the three months ended September 30, 2022.  Net income and net income available to common stockholders for the nine months ended September 30, 2023 was $164.7 million compared to net income and net income available to common stockholders of $183.7 million for the nine months ended September 30, 2022.  For the three and nine months ended September 30, 2023 compared to 2022 net interest income decreased $26.7 million and $39.3 million, respectively. Net interest income was negatively impacted by the continued narrowing in net interest spread due to Federal Reserve increases in interest rates over the last year. The net interest spread in the third quarter of 2023 was 1.63% compared to 1.94% in the second quarter of 2023 and 3.25% in the third quarter of 2022. The decrease in net interest income for the three and nine-month periods is primarily attributable to the rising costs associated with deposits.   Basic and diluted earnings per common share were both $0.98, for the three months ended September 30, 2023, compared to $1.18 and $1.17, respectively for the corresponding period in 2022.  Basic and diluted earnings per common share were $3.03 and $3.02, respectively, for the nine months ended September 30, 2023, compared to $3.38 and $3.37, respectively, for the corresponding period in 2022.  Return on average assets for the three and nine months ended September 30, 2023 was 1.37% and 1.50% compared to 1.77% and 1.64%, respectively, for the corresponding periods in 2022.  Return on average common stockholders’ equity for the three and nine months ended September 30, 2023 was 15.12% and 16.23%, respectively, compared to 20.49% and 20.43%, respectively, for the corresponding periods in 2022.   Net Interest Income and Net Interest Margin Analysis   Net interest income is the difference between the income earned on interest-earning assets and interest paid on interest-bearing liabilities used to support such assets. The major factors which affect net interest income are changes in volumes, the yield on interest-earning assets and the cost of interest-bearing liabilities. Our management’s ability to respond to changes in interest rates by effective asset-liability management techniques is critical to maintaining the stability of the net interest margin and the momentum of our primary source of earnings.   Taxable-equivalent net interest income decreased $26.7 million, or 21.1%, to $99.7 million for the three months ended September 30, 2023 compared to $126.5 million for the corresponding period in 2022, and decreased $39.3 million, or 11.3%, to $309.4 million for the nine months ended September 30, 2023 compared to $348.7 million for the corresponding period in 2022. Noninterest-bearing demand deposit balances decreased by $1.63 billion and $1.79 billion for the three and nine-month periods, respectively. A majority of these balances were moved into interest-bearing accounts as market interest rates increased during 2022 and 2023. Rates paid on interest-bearing deposits also increased as discussed in more detail below. The taxable-equivalent yield on interest-earning assets increased to 5.65% for the three months ended September 30, 2023 from 4.30% for the corresponding period in 2022, and increased to 5.48% for the nine months ended September 30, 2023 from 3.63% for the corresponding period in 2022.  The yield on loans for the three months ended September 30, 2023 was 6.13% compared to 4.77% for the corresponding period in 2022, and 5.92% compared to 4.51% for the nine months ended September 30, 2023 and September 30, 2022, respectively.  The cost of total interest-bearing liabilities increased to 4.02% for the three months ended September 30, 2023 compared to 1.05% for the corresponding period in 2022, and increased to 3.54% for the nine months ended September 30, 2023 from 0.61% for the corresponding period in 2022.  Net interest margin for the three months ended September 30, 2023 was 2.64% compared to 3.64% for the corresponding period in 2022, and 2.90% for the nine months ended September 30, 2023 compared to 3.26% for the corresponding period in 2022.   37     Beginning in March of 2022, the Federal Reserve Bank increased their targeted federal funds rate from 0 – 0.25% to its current range as of September 30, 2023 of 5.25 – 5.50%. Our cost of funding has increased as a result of deposit pricing pressures resulting from these rate increases. We believe our net interest income will benefit over a short period of time following the Federal Reserve Bank’s ceasing these rate increases.   The following tables show, for the three and nine months ended September 30, 2023 and September 30, 2022, the average balances of each principal category of our assets, liabilities and stockholders’ equity, and an analysis of net interest revenue. The accompanying tables reflect changes in our net interest margin resulting from changes in the volume and rate of our interest-earning assets and interest-bearing liabilities for the same periods. Changes resulting from mix or the number of days in the periods have been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. The tables are presented on a taxable-equivalent basis where applicable:               38     Average Balance Sheets and Net Interest Analysis   On a Fully Taxable-Equivalent Basis   For the Three Months Ended September 30,   (In thousands, except Average Yields and Rates)                                                         2023     2022               Interest     Average             Interest     Average       Average     Earned /     Yield /     Average     Earned /     Yield /       Balance     Paid     Rate     Balance     Paid     Rate   Assets:                                                 Interest-earning assets:                                                 Loans, net of unearned income (1)(2):                                                 Taxable   $ 11,545,003     $ 178,485       6.13 %   $ 10,900,105     $ 131,187       4.77 % Tax-exempt (3)     18,023       214       4.71       19,852       207       4.14   Total loans, net of unearned income     11,563,026       178,699       6.13       10,919,957       131,394       4.77   Mortgage loans held for sale     5,476       92       6.67       2,906       20       2.73   Investment securities:                                                 Taxable     2,029,995       15,568       3.07       1,797,560       11,089       2.47   Tax-exempt (3)     2,408       15       2.49       5,863       35       2.39   Total investment securities (4)     2,032,403       15,583       3.07       1,803,423       11,124       2.47   Federal funds sold     74,424       985       5.25       102,028       632       2.46   Restricted equity securities     8,471       126       5.90       7,724       71       3.65   Interest-bearing balances with banks     1,293,243       17,759       5.45       945,142       6,102       2.56   Total interest-earning assets   $ 14,977,043     $ 213,244       5.65     $ 13,781,180     $ 149,343       4.30   Non-interest-earning assets:                                                 Cash and due from banks     111,566                       256,607                   Net fixed assets and equipment     60,121                       60,155                   Allowance for credit losses, accrued interest and other assets     283,357                       294,006                   Total assets   $ 15,432,087                     $ 14,391,948                                                                     Liabilities and stockholders' equity:                                           Interest-bearing liabilities:                                                 Interest-bearing demand deposits   $ 2,153,973     $ 14,767       2.72 %   $ 1,722,926     $ 1,235       0.28 % Savings deposits     112,814       459       1.61       144,368       75       0.21   Money market accounts     6,538,426       69,947       4.24       4,444,583       9,982       0.89   Time deposits     1,093,388       10,728       3.89       809,057       2,363       1.16   Total interest-bearing deposits     9,898,601       95,901       3.84       7,120,934       13,655       0.76   Federal funds purchased     1,237,721       16,926       5.43       1,493,444       8,536       2.27   Other borrowings     64,734       690       4.23       65,406       690       4.19   Total interest-bearing liabilities   $ 11,201,056     $ 113,517       4.02 %   $ 8,679,784     $ 22,881       1.05 % Non-interest-bearing liabilities:                                                 Non-interest-bearing demand deposits     2,778,858                       4,410,318                   Other liabilities     52,797                       62,093                   Stockholders' equity     1,457,893                       1,263,870                   Accumulated other comprehensive loss     (58,517 )                     (24,117 )                 Total liabilities and stockholders' equity   $ 15,432,087                     $ 14,391,948                   Net interest income           $ 99,727                     $ 126,462           Net interest spread                     1.63 %                     3.25 % Net interest margin                     2.64 %                     3.64 %   (1)   Non-accrual loans are included in average loan balances in all periods. Loan fees of $2,996 and $3,849 are included in interest income in the third quarter of 2023 and 2022, respectively. Loan fees include accretion of PPP loan fees. (2)   Amortization of acquired loan premiums of $49 and $38 is included in interest income in 2023 and 2022, respectively. (3)   Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%. (4)   Unrealized losses of $(83,815) and $(36,688) are excluded from the yield calculation in the third quarter of 2023 and 2022, respectively.     39         For the Three Months Ended September 30,       2023 Compared to 2022 Increase (Decrease) in Interest Income and Expense Due to Changes in:       Volume     Rate     Total       (In Thousands)   Interest-earning assets:                         Loans, net of unearned income                         Taxable   $ 8,142     $ 39,156     $ 47,298   Tax-exempt     (20 )     27       7   Total loans, net of unearned income     8,122       39,183       47,305   Mortgages held for sale     28       44       72   Debt securities:                         Taxable     1,555       2,924       4,479   Tax-exempt     (22 )     2       (20 ) Total debt securities     1,533       2,926       4,459   Federal funds sold     (208 )     561       353   Restricted equity securities     11       44       55   Interest-bearing balances with banks     2,871       8,786       11,657   Total interest-earning assets   $ 12,357     $ 51,544     $ 63,901                             Interest-bearing liabilities:                         Interest-bearing demand deposits   $ 384     $ 13,148     $ 13,532   Savings     (19 )     403       384   Money market accounts     6,672       53,293       59,965   Time deposits     1,084       7,281       8,365   Total interest-bearing deposits     8,121       74,125       82,246   Federal funds purchased     (1,685 )     10,075       8,390   Other borrowed funds     (7 )     7       -   Total interest-bearing liabilities     6,429       84,207       90,636   Increase in net interest income   $ 5,928     $ (32,663 )   $ (26,735 )   Our growth in loans continues to drive favorable volume component change. The rate component was unfavorable as loan yields increased 136 basis points and average rates paid on interest-bearing liabilities increased 308 basis points.   40     Average Balance Sheets and Net Interest Analysis   On a Fully Taxable-Equivalent Basis   For the Nine Months Ended September 30,   (In thousands, except Average Yields and Rates)                                                         2023     2022               Interest                     Interest               Average     Earned /     Average     Average     Earned /     Average       Balance     Paid     Yield / Rate     Balance     Paid     Yield / Rate   Assets:                                                 Interest-earning assets:                                                 Loans, net of unearned income (1)(2):                                                 Taxable   $ 11,585,830     $ 513,534       5.93 %   $ 10,233,704     $ 345,165       4.51 % Tax-exempt (3)     18,434       611       4.43       22,868       717       4.19   Total loans, net of unearned income     11,604,264       514,145       5.92       10,256,572       345,882       4.51   Mortgage loans held for sale     4,019       180       5.99       1,442       29       2.69   Investment securities:                                                 Taxable     1,838,423       38,035       2.77       1,698,208       29,828       2.35   Tax-exempt (3)     3,045       64       2.81       7,263       136       2.50   Total debt securities (4)     1,841,468       38,099       2.77       1,705,471       29,964       2.35   Federal funds sold     47,040       1,826       5.19       50,102       738       1.97   Restricted equity securities     9,070       447       7       7,608       211       4   Interest-bearing balances with banks     757,722       29,621       5       2,295,282       12,389       3.63   Total interest-earning assets   $ 14,263,583     $ 584,318       5.48 %   $ 14,316,477     $ 389,213       3.63 % Non-interest-earning assets:                                                 Cash and due from banks     106,285                       179,378                   Net fixed assets and equipment     60,411                       60,675                   Allowance for credit losses, accrued interest and other assets     280,829                       301,675                   Total assets   $ 14,711,108                     $ 14,858,205                                                                     Liabilities and stockholders' equity:                                                 Interest-bearing liabilities:                                                 Interest-bearing demand deposits   $ 1,821,205     $ 26,771       1.97 %   $ 1,672,861     $ 2,903       0.23 % Savings deposits     123,098       1,192       1.29       138,160       194       0.19   Money market accounts     6,091,766       171,176       3.76       4,680,296       17,017       0.49   Time deposits     976,759       24,446       3.35       789,463       5,811       0.98   Total interest-bearing deposits     9,012,828       223,585       3.32       7,280,780       25,925       0.48   Federal funds purchased     1,272,285       48,199       5.07       1,554,283       12,539       1.08   Other borrowings     93,304       3,150       4.51       65,406       2,070       4.23   Total interest-bearing liabilities   $ 10,378,417     $ 274,934       3.54 %   $ 8,900,469     $ 40,534       0.61 % Non-interest-bearing liabilities:                                                 Non-interest-bearing demand deposits     2,913,244                       4,700,160                   Other liabilities     62,590                       59,362                   Stockholders' equity     1,405,702                       1,209,209                   Accumulated other comprehensive loss     (48,845 )                     (10,995 )                 Total liabilities and stockholders' equity   $ 14,711,108                     $ 14,858,205                   Net interest income           $ 309,384                     $ 348,679           Net interest spread                     1.94 %                     3.02 % Net interest margin                     2.90 %                     3.26 %   (1)   Non-accrual loans are included in average loan balances in all periods. Loan fees of $9,577 and $15,975, are included in interest income in 2023 and 2022, respectively. Loan fees include accretion of PPP loan fees. (2)   Amortization of acquired loan premiums of $148 and $108 is included in interest income in 2023 and 2022, respectively. (3)   Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21%. (4)   Unrealized losses of $(71,105) and $(14,920) are excluded from the yield calculation in 2023 and 2022, respectively.   41         For the Nine Months Ended September 30,       2023 Compared to 2022 Increase (Decrease) in Interest Income and Expense Due to Changes in:       Volume     Rate     Total       (In Thousands)   Interest-earning assets:                         Loans, net of unearned income                         Taxable   $ 49,847     $ 118,522     $ 168,369   Tax-exempt     (145 )     39       (106 ) Total loans, net of unearned income     49,702       118,561       168,263   Mortgages held for sale     89       62       151   Debt securities:                         Taxable     2,602       5,605       8,207   Tax-exempt     (87 )     15       (72 ) Total debt securities     2,515       5,620       8,135   Federal funds sold     (48 )     1,136       1,088   Restricted equity securities     38       198       236   Interest-bearing balances with banks     (13,320 )     30,552       17,232   Total interest-earning assets   $ 38,976     $ 156,129     $ 195,105                             Interest-bearing liabilities:                         Interest-bearing demand deposits   $ 280     $ 23,588     $ 23,868   Savings     (23 )     1,021       998   Money market accounts     6,613       147,546       154,159   Time deposits     1,677       16,958       18,635   Total interest-bearing deposits     8,547       189,113       197,660   Federal funds purchased     (2,668 )     38,328       35,660   Other borrowed funds     934       146       1,080   Total interest-bearing liabilities     6,813       227,587       234,400   Increase in net interest income   $ 32,163     $ (71,458 )   $ (39,295 )   The increase in our loan portfolio is positively impacting the volume component. However, the rate component has been negatively impacted by an increase of 293 basis points in the average rates paid on interest-bearing liabilities, partially offset by a rise in loan yields of 141 basis points.   Provision for Credit Losses   The provision for credit losses was $4.3 million for the three months ended September 30, 2023, a decrease of $11.3 million from $15.6 million for the three months ended September 30, 2022, and was $15.1 million for the nine months ended September 30, 2023, a $15.3 million decrease compared to $30.5 million for the nine months ended September 30, 2022. Due to the rising interest rate climate, management anticipates a slower pace in loan growth compared to the historical average. The decrease in provision expense is primarily attributable to slower forecasted growth of the budgeted loan portfolio within the ACL model. The ACL for September 30, 2023 and December 31, 2022 was $152.2 million and $146.3 million, or 1.31% and 1.25% of loans, net of unearned income, respectively. Annualized net credit charge-offs to quarter-to-date average loans were 0.11% for the three months ended September 30, 2023, compared to annualized net credit recoveries to quarter-to-date average loans of 0.02% for the same period in 2022. Annualized net credit charge-offs to year-to-date average loans were 0.06% for the nine months ended September 30, 2023, compared to 0.04% for the corresponding period in 2022. Nonperforming loans increased to $21.5 million, or 0.19% of total loans, at September 30, 2023 from $17.8 million, or 0.15% of total loans, at December 31, 2022, and were $15.5 million, or 0.15% of total loans, at September 30, 2022. See the section captioned “Asset Quality” located elsewhere in this item for additional discussion related to provision for credit losses.   Noninterest Income       Three Months Ended September 30,                     Nine Months Ended September 30,                       2023     2022     $ change     % change     2023     2022     $ change     % change   Noninterest income:                                                                 Service charges on deposit accounts   $ 2,163     $ 1,892     $ 271       14.3 %   $ 6,239     $ 6,167     $ 72       1.2 % Mortgage banking     825       784       41       5.2 %     1,963       1,924       39       2.0 % Credit card income     2,532       2,612       (80 )     (3.1   )%       6,627       7,656       (1,029 )     (13.4   )%   Securities losses     -       -       -       - %     -       (6,168 )     6,168       (100.0   )%   Increase in cash surrender value life insurance     1,818       1,637       181       11.1 %     5,935       6,978       (1,043 )     (14.9   )%   Other operating income     797       2,014       (1,217 )     (60.4   )%       2,274       9,836       (7,562 )     (76.9   )%   Total non-interest income   $ 8,135     $ 8,939     $ (804 )     (9.0   )%     $ 23,038     $ 26,393     $ (3,355 )     (12.7   )%     42     Noninterest income totaled $8.1 million for the three months ended September 30, 2023, a decrease of $804,000 compared to the corresponding period in 2022, and totaled $23.0 million for the nine months ended September 30, 2023, a decrease of $3.4 million, or 12.7%, compared to the corresponding period in 2022. Mortgage banking income increased $41,000, or 5.2%, to $825,000 for the three months ended September 30, 2023 compared to $784,000 for the same period in 2022, and increased $39,000, or 2.0%, to $2.0 million for the nine months ended September 30, 2023 compared to $1.9 million for the same period in 2022. Net credit card income decreased $80,000 to $2.5 million for the three months ended September 30, 2023 compared to the same period in 2022, and decreased $1.0 million to $6.6 million for the nine months ended September 30, 2023 compared to the same period in 2022. Bank-owned life insurance (“BOLI”) income increased $181,000, or 11.1%, to $1.8 million during the three months ended September 30, 2023, compared to the corresponding period in 2022, and decreased $1.0 million, or 14.9%, to $5.9 million for the nine months ended September 30, 2023 compared to $7.0 million for the same period in 2022. Other income decreased $1.2 million, or 60.4%, to $797,000 for the three months ended September 30, 2023 compared to $2.0 million for the same period in 2022, and decreased $7.6 million, or 76.9%, to $2.3 million for the nine months ended September 30, 2023 compared to $9.8 million for the same period in 2022. We recognized income on an interest rate cap of $48,000 for both the third quarter and year-to-date 2023 compared to income of $1.3 million during the third quarter of 2022 and $6.5 million year-to-date 2022. The interest rate cap terminated during the second quarter of 2023. Merchant service revenue increased $125,000, or 26.7%, to $594,000 during the three months ended September 30, 2023, compared to the corresponding period in 2022, and increased $354,000, or 27.8%, to $1.6 million for the nine months ended September 30, 2023 compared to $1.3 million for the same period in 2022.   Noninterest Expense       Three Months Ended September 30,                     Nine Months Ended September 30,                       2023     2022     $ change     % change     2023     2022     $ change     % change   Noninterest expense:                                                                 Salaries and employee benefits   $ 20,080     $ 19,687     $ 393       2.0 %   $ 57,941     $ 58,722     $ (781 )     (1.3   )%   Equipment and occupancy expense     3,579       3,140       439       14.0 %     10,435       9,056       1,379       15.2 % Third party processing and other services     6,549       7,213       (664 )     (9.2   )%       20,031       19,163       868       4.5 % Professional services     1,265       1,036       229       22.1 %     4,499       3,355       1,144       34.1 % FDIC and other regulatory assessments     2,346       975       1,371       140.6 %     6,105       3,254       2,851       87.6 % OREO expense     18       21       (3 )     (14.3   )%       30       56       (26 )     (46.4   )%   Other operating expense     7,826       10,613       (2,787 )     (26.3   )%       20,752       26,118       (5,366 )     (20.5   )%   Total non-interest expense   $ 41,663     $ 42,685     $ (1,022 )     (2.4   )%     $ 119,793     $ 119,724     $ 69       0.1 %   Noninterest expense totaled $41.7 million for the three months ended September 30, 2023, a decrease of $1.0 million, or 2.4%, compared to $42.7 million for the same period in 2022, and totaled $119.8 million for the nine months ended September 30, 2023, an increase of $69,000, or 0.1%, compared to $119.7 million for the same period in 2022.   Details of expense are as follows:     ● Salary and benefit expense increased $393,000, or 2.0%, to $20.1 million for the three months ended September 30, 2023, from $19.7 million for the same period in 2022, and decreased $781,000, or 1.3%, to $57.9 million for the nine months ended September 30, 2023 from $58.7 million for the same period in 2022. The number of FTE employees increased from 558 as of September 30, 2022, to 568 as of September 30, 2023.   ● Equipment and occupancy expense increased $439,000, or 14.0%, to $3.6 million for the three months ended September 30, 2023 from $3.1 million for the corresponding period in 2022, and increased $1.4 million, or 15.2%, to $10.4 million for the nine months ended September 30, 2023 compared to $9.1 million for the corresponding period in 2022. The year-over-year increase is primarily attributed to new leases that commenced after the third quarter of 2022.   ● Third party processing and other services decreased $664,000, or 9.2%, to $6.5 million for the three months ended September 30, 2023, from $7.2 million for the corresponding period in 2022, and increased $868,000, or 4.5%, to $20.0 million for the nine months ended September 30, 2023 compared to $19.2 million for the corresponding period in 2022. Third party processing and other services also includes Federal Reserve Bank charges related to correspondent bank settlement activities.   43       ● FDIC and other regulatory assessments increased $1.4 million, or 140.6%, to $2.3 million for the three months ended September 30, 2023 from $975,000 for the corresponding period in 2022, and increased $2.9 million, or 87.6%, to $6.1 million for the nine months ended September 30, 2023 compared to $3.3 million for the corresponding period in 2022. The FDIC increased the assessment rate by two basis points beginning in the first quarter of 2023.   ● OREO expense decreased $3,000, or 14.3%, to $18,000 for the three months ended September 30, 2023 from $21,000 for the corresponding period in 2022, and decreased $26,000, or 46.4%, to $30,000 from $56,000 for the nine months ended September 30, 2023 compared to the corresponding period in 2022.   ● Other operating expenses decreased $2.8 million, or 26.3%, to $7.8 million for the three months ended September 30, 2023, from $10.6 million for the corresponding period in 2022, and decreased $5.4 million, or 20.5%, to $20.8 million from $26.1 million for the nine months ended September 30, 2023 compared to the corresponding period in 2022. During the third quarter of 2022 we reached a preliminary settlement on a lawsuit and wrote down the value of a private investment resulting in charges of $3.1 million, or $2.4 million net of income tax.   Income Tax Expense   Income tax expense was $8.5 million for the three months ended September 30, 2023 compared to $13.0 million for the same period in 2022, and was $32.6 million for the nine months ended September 30, 2023, compared to $40.9 million for the same period in 2022. Our effective tax rate for the three and nine months ended September 30, 2023 was 13.81% and 16.51%, respectively, compared to 16.92% and 18.21% for the corresponding periods in 2022, respectively. We recognized $3.7 million and $11.1 million in federal new markets tax credits during the three and nine months ended September 30, 2023, respectively, compared to $3.1 million and $9.4 million during the same periods in 2022, respectively. We recognized excess tax benefits as an income tax credit to our income tax expense from the exercise and vesting of stock options and restricted stock during the three and nine months ended September 30, 2023 of $0 and $1.2 million, respectively, compared to $370,000 and $1.3 million during the three and nine months ended September 30, 2022, respectively. Our primary permanent differences are related to tax exempt income on securities, state income tax benefit on real estate investment trust dividends, various qualifying tax credits and change in cash surrender value of bank-owned life insurance.   We own real estate investment trusts for the purpose of holding and managing participations in residential mortgages and commercial real estate loans originated by the Bank. The trusts are wholly-owned subsidiaries of a trust holding company, which in turn is an indirect wholly-owned subsidiary of the Bank. The trusts earn interest income on the loans they hold and incur operating expenses related to their activities. They pay their net earnings, in the form of dividends, to the Bank, which receives a deduction for state income taxes.   Critical Accounting Estimates   The accounting and financial policies of the Company conform to U.S. generally accepted accounting principles and to general practices within the banking industry. To prepare consolidated financial statements in conformity with U.S. GAAP, 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. In management’s opinion, certain accounting policies have a more significant impact than others on the Company’s financial reporting. The allowance for credit losses and income taxes are particularly significant for the Company’s financial reporting. Information concerning our accounting policies and critical accounting estimates with respect to these items is available in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. There were no changes to the accounting policies for the allowance for credit losses or income taxes during the three and nine months ended September 30, 2023.   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   Like all financial institutions, we are subject to market risk from changes in interest rates. Interest rate risk is intrinsic to the balance sheet, influenced by variety factors such as differences in timing among the maturity or repricing of assets, liabilities and off-balance sheet instruments; differences in the amounts of assets, liabilities and off balance sheet instruments that are maturing or repricing at the same time; differences in the amounts by which short-term and long term market interest rates change  (e.g., yield curve shifts); and the impact of changes in the maturity of various assets, liabilities or off-balance sheet instruments as interest rates change. If rates are rising, and the level of rate-sensitive liabilities exceeds the level of rate-sensitive assets, the net interest margin will be negatively impacted. Conversely, if rates are falling, and the level of rate-sensitive liabilities is greater than the level of rate-sensitive assets, the impact on the net interest margin will be favorable. Managing interest rate risk is further complicated by the fact that all rates do not change at the same pace; in other words, short-term rates may be rising while longer-term rates remain stable. In addition, different types of rate-sensitive assets and rate-sensitive liabilities react differently to changes in rates.   44     To manage interest rate risk, we must take a position on the expected future trend of interest rates. Rates may rise, fall or remain the same. Our asset-liability committee develops its view of future rate trends and strives to manage rate risk within a targeted range by monitoring economic indicators, examining the views of economists and other experts, and understanding the current status of our balance sheet. Our annual budget reflects the anticipated rate environment for the next 12 months. The asset-liability committee conducts a quarterly analysis of the rate sensitivity position and reports its results to our board of directors.   The asset-liability committee thoroughly analyzes the maturities of rate-sensitive assets and liabilities. This analysis measures the “gap”, which is defined as the difference between the dollar amount of rate-sensitive assets repricing during a period and the volume of rate-sensitive liabilities repricing during the same period. The gap is also expressed as the ratio of rate-sensitive assets divided by rate-sensitive liabilities. If the ratio is greater than one, the dollar value of assets exceeds the dollar value of liabilities; the balance sheet is “asset-sensitive.” Conversely, if the value of liabilities exceeds the value of assets, the ratio is less than one and the balance sheet is “liability-sensitive.” Our internal policy includes guidelines for maximum sensitivities for different benchmark interest rate simulations. For example, management should maintain the gap such that net interest margins will not change more than 9% if interest rates change 100 basis points or more than 13% if interest rates change 200 basis points. There have been no changes to our policies or procedures for analyzing our interest rate risk since December 31, 2022, and there have been no material changes to our sensitivity to changes in interest rates since December 31, 2022, as disclosed in our Annual Report on Form 10-K.   ITEM 4. CONTROLS AND PROCEDURES   CEO and CFO Certification .   Appearing as exhibits to this report are Certifications of our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”). The Certifications are required to be made by Rule 13a-14 or Rule 15d-14 under the Securities Exchange Act of 1934. This item contains the information about the evaluation that is referred to in the Certifications, and the information set forth below in this Item 4 should be read in conjunction with the Certifications for a more complete understanding of the Certifications.   Evaluation of Disclosure Controls and Procedures.   We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.   We conducted an evaluation (the "Evaluation") of the effectiveness of the design and operation of our disclosure controls and procedures under the supervision and with the participation of our management, including our CEO and CFO, as of September 30, 2023. Based upon the Evaluation, our CEO and CFO have concluded that, as of September 30, 2023, our disclosure controls and procedures are effective to ensure that material information relating to the Company. and its subsidiaries is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared.   Changes in Internal Control Over Financial Reporting   There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   PART II. OTHER INFORMATION   ITEM 1. LEGAL PROCEEDINGS   From time to time we may be a party to various legal proceedings arising in the ordinary course of business. Management does not believe the Company or the Bank is currently a party to any material legal proceedings.   ITEM 1A. RISK FACTORS   Our business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond our control. We have identified a number of these risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which should be taken into consideration when reviewing the information contained in this report. There have been no material changes in the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.   45     ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS   None.   Our Board of Directors declared the following dividends during the third quarter of fiscal year 2023:   Declaration Date Record Date Payment Date   Dividend per Share     Amount (in thousands)   September 18, 2023 October 2, 2023 October 10, 2023   $ 0.28     $ 15,239     Refer to the “Capital Adequacy” section within Management’s Discussion and Analysis in Part I, Item 2 for information regarding the Company’s dividend policy and restrictions on payment of dividends.   ITEM 3. DEFAULTS UPON SENIOR SECURITIES   None.   ITEM 4. MINE SAFETY DISCLOSURES   Not applicable.     ITEM 5. OTHER INFORMATION   (a)         The Company did not implement any material changes to the procedures by which security holders may recommend nominees to the Company’s board of directors during the quarter ended September 30, 2023.   (b)          None of the Company’s directors or officers adopted or terminated any Rule 10b5 - 1 or non- 10b5 - 1 trading arrangements during the quarter ended September 30, 2023.   ITEM 6. EXHIBITS   Exhibit:   Description 31.01 Certification of principal executive officer pursuant to Rule 13a-14(a). 31.02 Certification of principal financial officer pursuant to Rule 13a-14(a). 32.01 Certification of principal executive officer pursuant to 18 U.S.C. Section 1350. 32.02   Certification of principal financial officer pursuant to 18 U.S.C. Section 1350. 101.INS     Inline XBRL Instance Document 101.SCH     Inline XBRL Taxonomy Extension Schema Document 101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB     Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)   46     SIGNATURES     Pursuant to the requirements 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.       Date: November 3, 2023    By /s/ Thomas A. Broughton III     Thomas A. Broughton III     President and Chief Executive Officer     Date: November 3, 2023    By /s/ William M. Foshee     William M. Foshee     Chief Financial Officer         47