Highlights

  • ServisFirst shows 34.03% one-year basic EPS growth, a P/E of 13.17 and PEG of 0.00.
  • Third quarter net income was $87.3 million, against $65.6 million a year earlier.
  • Loans grew $1.43 billion, or 11%, year over year; net interest margin was 3.63%.
  • The company authorized repurchases of up to two million shares through December 31, 2027.

Basic earnings per share growth of 34.03% over one year, a trailing twelve-month P/E of 13.17 and a PEG of 0.00 on an expected basis define ServisFirst Bancshares (NYSE:SFBS) as an undervalued growth stock, with shares trading at USD 40.09 on October 28, 2026, down 1.45%. Alongside those figures, the bank holding company completed a two-for-one stock split during the third quarter, reported third quarter 2026 net income of $87.3 million on October 19, and announced its inaugural stock repurchase program after quarter-end.

ServisFirst Bancshares is a bank holding company incorporated in Delaware, with its principal executive offices in Homewood, Alabama. Through its subsidiary ServisFirst Bank, it provides business and personal financial services from locations in Alabama, Florida, Georgia, North and South Carolina, Tennessee, Texas and Virginia. The Bank originates commercial, consumer and other loans, accepts deposits, and provides electronic banking, treasury and cash management, and correspondent banking services. It had 675 full-time equivalent employees at September 30, 2026.

Growth: Third Quarter Earnings, Net Interest Income and Loans

Net income and net income available to common stockholders were $87.3 million for the quarter ended September 30, 2026, against $65.6 million in the third quarter of 2025. Basic and diluted earnings per share were both $0.80, against $0.78 in the second quarter of 2026 and $0.60 a year earlier. All per-share amounts reflect the two-for-one split.

Net interest income was $159.8 million against $133.4 million, and the net interest margin was 3.63% against 3.09%. Ending loans were $14.74 billion, up $1.43 billion, or 10.7%, from $13.31 billion. Noninterest-bearing demand deposits were up 12.0%.

Valuation: P/E of 13.17, PEG of 0.00 and Returns on Equity

The P/E ratio of 13.17 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 on an expected basis. Annualized return on average common stockholders' equity was 17.26% against 14.88%. Book value per share was $18.63 against $16.31, and tangible book value per share, a non-GAAP measure, was $18.51 against $16.18. The efficiency ratio was 30.20% against 35.22%.

On the third quarter call, the chief financial officer said the company continues to grow revenue through asset and margin growth while holding its efficiency ratio. He also said the company is generating capital faster than it is using it.

Capital Position, Repurchase Program and Liquidity

Stockholders' equity was $2,037,346 thousand against $1,781,647 thousand a year earlier. Preliminary common equity tier 1 capital to risk-weighted assets was 11.98% against 11.49%, and tier 1 capital to average assets was 11.11%. Tangible common equity to total tangible assets, a non-GAAP measure, was 11.05%.

After quarter-end the company authorized the repurchase of up to two million shares of common stock through December 31, 2027. On the call, the chief executive officer said the company has never repurchased shares before and will be careful about how and when it does so. Cash and cash equivalents were $1,185,015 thousand, and total available liquidity was $12,156,026 thousand. Management said the company has no FHLB advances and no brokered deposits.

Disclosed Risks and Outlook

Total deposits were $14,087,378 thousand, down $461.4 million from the second quarter, and the company said on the call that it allowed higher-rate municipal deposits to roll off. Annualized net charge-offs to average loans were 0.21% against 0.27%, and the allowance for credit losses to total loans was 1.28%. The provision for loan losses was $14.9 million against $9.3 million. Management said it took a charge-off of just over $7 million on a portfolio of eight large multifamily credits and expects an orderly liquidation over the next 2 to 4 quarters.

Noninterest expense was $52.2 million, up 8.8%, with the increase primarily due to the full impact of the Houston market expansion in salary and benefits. The chief credit officer said that given uneven payoffs and the current rate environment, it is challenging to estimate payoff activity.

For the period ahead, management said it expects net interest margin expansion to continue into 2027, with $1.5 billion of low fixed-rate loans repricing in the next 12 months. The chief financial officer said he expects a quarterly noninterest expense run rate of about $50 million to $51 million, and the chief executive officer said Houston start-up losses are expected to decline over the next few quarters.