ServisFirst Bancshares, Inc. (SFBS) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of ServisFirst Bancshares, Inc. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Tom Broughton. Mr. Broughton, the floor is yours.

Thank you, and good morning to all. I'm Tom Broughton, Chairman of the Board and President of the company, and I'll be the chairperson of today's meeting. It's my pleasure to welcome you to our first Annual Virtual Shareholders Meeting due to the pandemic, our 2020 Annual Shareholders Meeting. I hope it's our last pandemic virtual shareholders meeting as well. The purpose of this meeting is to elect the director to the company to serve until the 2021 Annual Meeting and until their successors are elected and qualified, to hold an advisory vote on the company's executive compensation or what is called, Say on Pay vote, and to ratify the appointment of Dixon Hughes Goodman LLP as our independent registered public accounting firm for the year ended December 31, 2020. The notice for this meeting and the availability of our proxy statement was sent to the shareholder of record on/or about March 11, 2020, and released our press release regarding our change to a virtual meeting format on March 30, 2020. We are hosting today's meeting on a virtual platform. We think it's the best choice for today. While the meeting was virtual-only, we do welcome questions from our shareholders. When we come to the Q&A portion of the meeting, we will take questions that are submitted online. You can submit your questions through the text box located on your screen. Please remember that you may vote your shares online at any time during this meeting prior to the closing of the polls. Members of our Board are on the call today, and we have a great Board of Directors: Richard Cashio, Jimmy Filler, Mike Fuller; Chris Mettler, Hatton Smith and Irma Tuder are all on the call. And Bud Foshee, our EVP, Chief Financial Officer and Corporate Secretary, will act as secretary of the Annual Meeting today, and also Mr. Foshee will act as inspector of election and conduct formal tabulation of the vote. Sarah Saunders and Stephanie Blocksma from Dixon Hughes Goodman LLP, our independent public accounting firm, are also participating in our virtual meeting today. During the Q&A period at the end of this meeting, they will be available to answer any questions concerning the company's financial statements. So I hope there are none on that. Should you desire to ask a question during this meeting, please use text box located near the top of your screen, and we'll respond to questions at the appropriate time. Only stockholders or proxies of stockholders will be able to ask questions. The secretary has delivered an affidavit of notice, establishing that notice of this meeting was properly delivered to all shareholders entitled to vote. A copy of the notice and affidavit of notice will be incorporated in the minutes of the meeting. All shareholders of record as of the close of business of February -- on February 24, 2020, are entitled to vote at this meeting. A list of the shareholders of record is accessible on this virtual meeting platform by selecting the Stockholder List link located on the left side of your screen. The first order of business is to see if we have a quorum. I've been informed in response to our notice of this annual meeting and our proxy statement, the company has received proxies representing 47,187,750 shares or 88% of the company's outstanding common stock. Because the number of returned proxies is in excess of the number necessary to constitute a quorum, this meeting is properly convened. At this time, the polls are now open. They'll remain open until the conclusion of meeting discussions on proposal 3, the vote to ratify the appointment of Dixon Hughes Goodman as our independent registered accounting firm for year ending December 31, 2020. But I would like to point out that most of you are voting -- have returned proxies authorizing the persons named in the proxy to vote on all propositions coming before this annual meeting. Shareholders who are revoting by a proxy need not to cast a vote online today, unless they wish to change their vote on their proxies. If there are any shareholders or tenants who have not voted by a proxy and now wish to vote, you may do so using the virtual meeting dashboard. The first matter to be acted upon by the shareholders is the election of 6 Directors to hold office until the 2021 Annual Meeting, and their successors are elected and qualified or their earlier termination or resignation. The nominees together with additional information about them are described in proposal 1 of proxy statement. Our Board has unanimously nominated: myself, Tom Broughton, Richard Cashio, Jimmy Filler; Mike Fuller, Chris Mettler, Irma Tuder and Hatton Smith, all of whom are currently serving for election as Directors. If there are questions or comments specifically related to matters, which have a bearing on election of Directors, this is an appropriate time to raise them. Please submit any questions you may have by typing the question in the text box in the virtual meeting portal located near the top of your screen. Please note that we may not have time to answer all questions submitted and all questions will be read verbatim prior to response. If you have elected to vote online, please indicate whether you vote for or withhold your vote on this proposal. After voting has been completed on all matters set forth in the agenda, we will announce the results of the voting. We will now proceed to proposal #2, which is a resolution on an advisory vote basis to approve our executive compensation. This proposal is described on Page 14 of the proxy statement, and the text of the resolution is listed there. If any questions or comments specifically relating to the matters which have a bearing on proposal 2, this is an appropriate time to raise them. Please submit any questions you may have by typing the question in the text box on the virtual meeting portal near the top of your screen. Please note that we may not have time to answer all questions submitted. There are none. If you've elected to vote online, please indicate whether you vote for or against or abstain for voting on this proposal. After vote has been completed on all matters on the agenda, we will announce the results of the voting. We will now propose -- proceed to proposal #3, which is the ratification of appointment of Dixon Hughes Goodman as the company's independent accounting firm for the year ended December 31, 2020. Proposal 3 starts on Page 26 of the proxy statement, and the resolution included in this proposal is now before the meeting. Our Board recommends that shareholders ratify the appointment of Dixon Hughes Goodman. If there are any questions or comments specifically related to matters, which have a bearing on the ratification of Dixon Hughes as the company's accounting firm, this is an appropriate time to raise them. Please submit any questions you may have by typing the question in the text box in the virtual meeting portal located near the top of your screen. There are no questions. If there are no further questions or comments regarding 3 proposals submitted to shareholders for action, I suggest that those persons voting online complete your voting. While the votes are being tabulated, I would like to remark about the company's performance. It's typically what I do. And I won't -- 2019 seems like so long ago. I don't think it's appropriate to comment on 2019, which was a good year, good by most banks' standards, not good by ServisFirst's standards, but nevertheless, a very good year. Earnings were up 9% last year, but below what our expectations were for the year. But I will comment on where we are on the pandemic, and we had a very good pandemic plan we activated on March 2. I was very pleased to find out that our pandemic plan addressed all issues that were necessary. It was very complete. We've certainly made tweaks along the way. The very first thing we did was focus on employee safety because without the employees safe, we cannot operate the bank. So that was our first focus. And our second focus on serving our clients' needs. Certainly, we have been extremely busy over the last several weeks with requests for the SBA PPP loans for small businesses. So we have made and closed over 3,000 loans, totaling $914 million. Actually, it was about what we typically -- the number of loans we make in 6 months, we made in less than 3 weeks. And actually, I know the house is voting this morning. They may have voted, but I imagine they're still talking, which they do a lot of. And we expect to get additional funding for the remaining customers that did not get served on Round 1. So hopefully, we'll be able to start submitting those to SBA later today. So with that, I'll move on and ask Bud Foshee, the inspector of election, for his preliminary report.

Thanks, Tom. The ballots and proxies have been counted preliminarily, and it appears that the results are as follows: more than majority of the shares present, or by proxy, have been voted in favor of election of the 7 directors nominated in the proxy statement; approval of the company's executive compensation as described in the proxy statement; and ratification of Dixon Hughes Goodman as our independent registered public accounting firm for the year ending December 31, 2020.

Thank you. Are there any further items for discussion or questions from the shareholders? I think it's probably a good sign that we don't have many questions from shareholders at this point. That's usually not a good sign for a company. So unless there is any other business to discuss, this concludes the meeting, the business to be transacted at this meeting. I thank you all for attending today's annual meeting and for your interest and support of our company. If there is no further business to come before the meeting, we'll adjourn it, and thank you for your attendance.

This concludes the meeting. You may now disconnect.