KBRA Affirms Ratings for ServisFirst Bancshares, Inc.

KBRA affirms the senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, and the short-term debt rating of K2 for Birmingham, Alabama based ServisFirst Bancshares, Inc. (NYSE: SFBS) (“ServisFirst” or “the company”). In addition, KBRA affirms the deposit and senior unsecured debt ratings of A-, the subordinated debt rating of BBB+, and the short-term deposit and debt ratings of K2 for its subsidiary, ServisFirst Bank. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

SFBS’ ratings are supported by its stronger-than-peer earnings profile that has held up well despite the volatile interest rate environment. As a traditionally liability-sensitive institution, driven by a rate-sensitive deposit base featuring large and sophisticated commercial customers and Fed Funds purchased funding component, earnings have moderated from a cyclical high in 2022, due to NIM compression and lower net interest income. Nonetheless, recent earnings performance as evidenced by ROA remains 33 bps above peers at 1.44% for 9M25. As such, KBRA is comfortable with the company’s narrow, spread-reliant business model, which generates limited fee income (7% of operating revenue) but benefits from consistent execution and strong cost discipline. The period of outsized loan growth from 2020-2022 contributed to a notable decline in capital metrics, with the CET1 ratio troughing at 9.4% in 3Q22. Management has executed a multi-year effort to rebuild core capital as evidenced by a 200-bp increase in the CET1 ratio to 11.5% at 3Q25. While risk-weighted capital metrics remain modestly below rating category medians, KBRA expects metrics to remain somewhat stable given its concentrated business mix and exposure to large-dollar CRE and C&D lending. The ratings also reflect management’s conservative underwriting resulting in historically contained loss content averaging below 10 bps since 2021. KBRA acknowledges negative credit migration trends – hardly dissimilar to peers – as NCOs and NPLs increased to 0.27% and 1.26% at 3Q25. We believe the slight deterioration in credit quality is temporary in nature as management attributed the increase in charge-off activity to idiosyncratic events. Furthermore, the uptick in NPAs stemmed from a relationship with a merchant developer - consisting of eight loans – in which SFBS was able to obtain additional collateral to bolster its position and expects resolutions that will produce meaningful liquidity in the near-term.

Rating Sensitivities

While the Stable Outlook reflects KBRA’s view that a rating change is not expected over the medium term, increased revenue diversification bolstering the earnings profile along with the maintenance of asset quality metrics within historic norms and capital metrics in line with rating category could result in positive rating momentum over time. A more aggressive capital management strategy or, while not expected, material deterioration in credit quality or the company’s liquidity profile would be viewed negatively.

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