About Thomas Broughton
In a September 2024 interview, Broughton discussed ServisFirst Bank's second quarter earnings and attributed loan growth to the Southeast United States, describing the region as the bank's footprint and a "big driver." He stated that the bank is "a business bank primarily" and that businesses in its market are "growing and doing quite well." Broughton noted that the bank's net interest margin expanded for the first time in the quarter and said he expects margins to "drive higher for the next six quarters."
Broughton said the bank's credit losses were "down from last year," reporting that losses were approximately eight basis points in the current year compared to 12 basis points the prior year. He described losses as "very moderate." Regarding consumer behavior, Broughton stated that customers serving lower-income consumers are "trading down," citing furniture sales as an example, but added that "the consumer seems very resilient."
Source: AI-verified profile updated from Thomas Broughton's recent appearances.
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Transcript (11 segments)
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Frank0:03
Tom, good morning. Thank you for being with us on 'Worldwide Exchange.'
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Thomas Broughton0:07
Good morning, Frank.
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Frank0:09
The bank in the Birmingham, Alabama area with loan growth of 95%. You have a diversified business with construction and residential. What is the driver?
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Thomas Broughton0:21
The driver is the Southeast United States. Our footprint is the Southeast United States. We have the integration and the market is seeing positive results from that, and that's a big driver for us.
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Frank0:36
Is there one particular area? You mentioned the mortgage loan portfolio is diversified. We know rates are pretty elevated. We have seen that impacted with the sales in the residential market. Are you seeing residential sales jump there, or is it more commercial or multifamily? What area?
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Thomas Broughton0:55
We have a relatively small residential mortgage portfolio. What we're seeing is the businesses are doing well. We're a business bank primarily. The businesses are growing and doing quite well. We primarily serve owner-manager companies. Our developers are doing quite well. We're seeing positive results. Our loan officers are moderate on a year-to-date basis. Our margins are getting better quarter over quarter, and we expect them to drive higher for the next six quarters.
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Frank1:27
You mentioned margins. I was looking at your net interest margin. What do you attribute that move to? We heard from other analysts and other banking CEOs that customers are moving to higher interest products. Is that something you are seeing?
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Thomas Broughton1:46
We were. Our margins were squeezed over the last year. This is the first quarter where we see margin expansion. Our margins are getting better almost on a monthly basis. We're seeing a much more positive result this year than last year.
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Frank2:06
We talk a little bit about the stretched consumer on CNBC. Consumers having to trade down and do things like that. What do you hear about their finances and economic conditions in your region, which is the Southeast?
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Thomas Broughton2:22
We primarily serve business customers as well as some developers, primarily multifamily developers. What we have seen is, yes, our customers that serve the lower-income consumers are saying they are trading down. For example, furniture sales. People who specialize in manufacturing consumer furniture at the lower end are seeing sales. The consumer seems very resilient. It seems very positive.
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Frank2:59
Another thing I noticed in the report is you lowered your provision for credit losses. Is that a sign you are seeing people borrowing from you are having better economic businesses, and businesses are doing better, and you are less concerned about default than just a year ago?
