Regional banking company ServisFirst Bancshares (NYSE:SFBS) fell short of the market’s revenue expectations in Q2 CY2025, but sales rose 15.1% year on year to $132.1 million. Its non-GAAP profit of $1.21 per share was in line with analysts’ consensus estimates.
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ServisFirst Bancshares (SFBS) Q2 CY2025 Highlights:
- Net Interest Income: $131.7 million vs analyst estimates of $131.9 million (24.4% year-on-year growth, in line)
- Net Interest Margin: 3.1% vs analyst estimates of 3% (31 basis point year-on-year increase, 11.7 bps beat)
- Revenue: $132.1 million vs analyst estimates of $140.3 million (15.1% year-on-year growth, 5.8% miss)
- Efficiency Ratio: 33.5% vs analyst estimates of 33.8% (0.3 percentage point beat)
- Adjusted EPS: $1.21 vs analyst estimates of $1.21 (in line)
- Market Capitalization: $4.53 billion
Tom Broughton, Chairman, President, and CEO, said, “We were pleased with the loan growth in the quarter, combined with the improved environment for banks like ServisFirst.”
Company Overview
Founded in 2005 with a focus on serving underserved mid-sized businesses, ServisFirst Bancshares (NYSE:SFBS) is a bank holding company that provides commercial banking services to businesses and professionals through its subsidiary ServisFirst Bank.
Sales Growth
In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees.
Over the last five years, ServisFirst Bancshares grew its revenue at an impressive 9.1% compounded annual growth rate. Its growth beat the average bank company and shows its offerings resonate with customers.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. ServisFirst Bancshares’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 3.1% over the last two years was well below its five-year trend. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, ServisFirst Bancshares’s revenue grew by 15.1% year on year to $132.1 million but fell short of Wall Street’s estimates.
Net interest income made up 93% of the company’s total revenue during the last five years, meaning ServisFirst Bancshares lives and dies by its lending activities because non-interest income barely moves the needle.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
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Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
ServisFirst Bancshares’s TBVPS grew at an incredible 13.4% annual clip over the last five years. TBVPS growth has recently decelerated a bit to 12.3% annual growth over the last two years (from $24.79 to $31.27 per share).
Over the next 12 months, Consensus estimates call for ServisFirst Bancshares’s TBVPS to grow by 12.8% to $35.27, top-notch growth rate.
Key Takeaways from ServisFirst Bancshares’s Q2 Results
Net interest income was in line while net interest margin beat. Efficiency ratio beat slightly and EPS was in line. Overall, this was a fine quarter, with underperformance on the revenue line from non-core, non-interest income-driven metrics. The stock remained flat at $82.46 immediately after reporting.
ServisFirst Bancshares didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.