ServisFirst Bancshares has been treading water for the past six months, recording a small loss of 2.2% while holding steady at $80.37. The stock also fell short of the S&P 500’s 18.4% gain during that period.
Is now the time to buy SFBS? Find out in our full research report, it’s free.
Why Is SFBS a Good Business?
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.
1. Net Interest Income Drives Additional Growth Opportunities
Markets consistently prioritize net interest income over non-recurring fees, recognizing its superior quality compared to the more unpredictable revenue streams.
ServisFirst Bancshares’s net interest income has grown at a 9.7% annualized rate over the last five years, a step above the broader banking industry and in line with its total revenue.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
ServisFirst Bancshares’s astounding 10.6% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
3. Steady Increase in TBVPS Highlights Solid Asset Growth
In the banking industry, tangible book value per share (TBVPS) provides the clearest picture of shareholder value, as it focuses on concrete assets while excluding intangible items that may not hold value during challenging times.
ServisFirst Bancshares’s TBVPS increased by 13.4% annually over the last five years, and although its annualized growth has recently decelerated a bit to 12.3% over the last two years (from $24.79 to $31.27 per share), we still think its performance was solid.
Final Judgment
These are just a few reasons ServisFirst Bancshares is a rock-solid business worth owning. With its shares lagging the market recently, the stock trades at 2.4× forward P/B (or $80.37 per share). Is now a good time to initiate a position? See for yourself in our comprehensive research report, it’s free.
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