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CST: 21/11/2019 09:43:05   

State Bank Corp. Fourth Quarter Earnings Increase 48% to $2.28 Million Compared to 4Q17, Full Year 2018 Earnings Increased 36% to a Record $8.58 Million

293 Days ago

LAKE HAVASU CITY, Ariz., Feb. 01, 2019 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCPink:SBAZ) (“Company”), the holding company for State Bank of Arizona (“Bank”), today reported that net income increased by 48.2% to $2.28 million, or $0.28 per diluted share, for the fourth quarter ended December 31, 2018, as compared to $1.54 million, or $0.19 per diluted share, for the fourth quarter of 2017.  In the preceding quarter, the Company reported earnings of $2.31 million, or $0.29 per diluted share. 

For the year ended December 31, 2018, net income grew by 36.3% to a record $8.58 million, or $1.06 per diluted share, compared to $6.29 million, or $0.78 per diluted share, for 2017. 

“2018 was a banner year for State Bank Corp. We produced record earnings for the year, highlighted by double digit loan growth, solid net interest income and a healthy net interest margin,” stated Brian M. Riley, President and Chief Executive Officer.  “Overall, these factors contributed to a return on average assets of 1.41% and a return on average equity of 14.53% for the quarter.  We have been successful at keeping operating expenses in check while growing the franchise, and now have both the infrastructure and banking teams in place to continue to grow. 

“Earlier this week, we opened our first full service branch in Phoenix, following the success of our loan production office opened there in May.  Our focus in the coming year remains on expanding market share in Phoenix, while continuing to look for growth opportunities in other Arizona markets,” added Riley.

Fourth Quarter 2018 Financial Highlights:

  • Fourth quarter net income increased 48.2% to $2.28 million, or $0.28 per diluted share.
  • Loans grew $23.0 million to $407.3 million.
  • The net interest margin remained healthy at 4.01%.
  • Return on average assets was 1.41%.
  • Return on average equity was 14.53%.
  • Tangible book value increased 11.5% to $7.10 per share from $6.37 per share a year earlier.

Net interest margin was 4.01% in the fourth quarter 2018 compared to 4.12% in the preceding quarter and 3.86% in the fourth quarter a year ago.  The decreased margin was a result of the recognition of interest income from a resolution of a large nonaccrual loan relationship in the previous quarter.

The provision for loan losses was $137,000 during the fourth quarter of 2018, with net recoveries of $2,000.  The allowance for loan losses totaled $3.8 million at December 31, 2018, or 0.93% of total loans.  Excluding acquired loans, the reserve ratio was 1.02%.  On the acquired portfolio, the credit component of the loan purchase discount remains greater than an imputed reserve.

Total assets were $655.3 million at December 31, 2018, an increase of $34.7 million, or 5.6%, from $620.6 million at December 31, 2017.  Total loans held for investment were $407.3 million as compared to $347.9 million at December 31, 2017, reflecting an increase of 17.0%. 

Total deposits were $557.8 million at year-end, an increase of $8.4 million, or 1.54%, from $549.4 million at December 31, 2017.  Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased to $497.7 million at December 31, 2018, or 2.3%, from $486.8 million at December 31, 2017.  Core deposits now comprise 89.2% of total deposits. 

Nonperforming assets were $1.7 million at December 31, 2018, a decrease from $6.9 million at December 31, 2017.  The decrease primarily consists of two loan relationships that the Company favorably resolved.  Nonperforming assets represented 0.25% of total assets at December 31, 2018. 

Shareholder equity increased to $64.4 million at December 31, 2018, from $58.7 million at December 31, 2017.  At December 31, 2018, tangible book value per share was $7.10 per share compared to $6.37 per share at December 31, 2017. 

Capital Management

State Bank Corp., and State Bank of Arizona, have consolidated capital ratios and Bank capital ratios that exceed the regulatory guidelines for a well-capitalized financial institution under the Basel III and Dodd Frank Wall Street Reform requirements.  The Bank reported the following capital ratios at December 31, 2018:

Common Equity Tier 1 Capital Ratio 13.18%
Tier 1 Leverage Ratio 10.42%
Tier 1 Capital Ratio
13.18%
Total Capital Ratio 13.94%

About the Company

State Bank Corp., headquartered in Lake Havasu City, Arizona, is the parent company of State Bank of Arizona, the largest locally-owned bank in Arizona.  State Bank of Arizona is a full-service bank providing deposit and loan products, and convenient on-line banking to individuals, businesses and professionals. The Bank was established in October 1991, and the holding company was formed in 2004.  Specializing in providing exceptional customer service and investing in its local communities, State Bank of Arizona was named 2018 Bank of the Year by Western Independent Bankers.  The Bank has ten full-service branches: two in Lake Havasu City, two in Kingman, two in Prescott, one in Bullhead City, one in Prescott Valley, one in Phoenix, and one in Cottonwood, Arizona.  The Bank also operates a loan production office in Sedona, AZ.  The Company is traded over-the-counter as SBAZ. For further information, please visit the web site: www.statebankaz.com

Forward-looking Statements

This press release may include forward-looking statements about State Bank Corp. and State Bank of Arizona.  These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: the expected cost savings, synergies and other financial benefits from the completed merger might not be realized within the expected time frames or at all. Annualized, pro forma, projected and estimated numbers in this press release are used for illustrative purposes only, are not forecasts and may not reflect actual results. All forward-looking statements included in this press release are based on information available at the time of the release, and State Bank Corp. and State Bank of Arizona assume no obligation to update any forward-looking statements.

UNAUDITED FINANCIAL STATEMENTS FOLLOW

State Bank Corp.            
Statement of Operations            
               
      For the Quarter Ended       Year to Date  
Dollars in thousands - Unaudited 12/31/2018 9/30/2018 12/31/2017   12/31/2018 12/31/2017
Statements of Operations            
  Interest income            
  Loans, including fees $   5,612   $   5,548   $   4,926   $   21,251   $   19,539  
  Securities      891       904       855       3,588       2,844  
  Fed funds and other     100       156       87       446       371  
  Total interest income     6,603       6,608       5,868       25,285       22,754  
                                 
               
  Interest expense            
  Deposits     338       259       181       1,033       713  
  Borrowings     205       159       108       611       424  
  Total interest expense     543       418       289       1,644       1,137  
  Net interest income     6,060       6,190       5,579       23,641       21,617  
  Provision for loan losses     137       160       100       490       (290 )
  Net interest income after loan loss provision     5,923       6,030       5,479       23,151       21,907  
                                 
               
  Noninterest income            
  Service charges on deposits     190       170       147       648       575  
  Mortgage loan fees     394       287       294       1,225       1,477  
  Gain on sale of loans     360       366       605       1,744       1,902  
  Other income     618       529       174       2,069       1,250  
  Total noninterest income     1,562       1,352       1,220       5,686       5,204  
                                 
               
  Noninterest expense            
  Salaries and employee benefits     2,892       2,644       2,529       10,907       10,121  
  Net occupancy expense     195       234       161       783       671  
  Equipment expense     91       82       91       348       385  
  Data processing     525       470       413       1,871       1,852  
  Director fees & expenses     133       64       152       355       350  
  Insurance     36       25       51       136       146  
  Marketing & promotion     82       234       116       570       531  
  Professional fees     98       177       93       726       425  
  Office expense     62       70       30       141       162  
  Regulatory assessments     53       54       55       228       237  
  OREO and repossessed assets     (95 )     29       8       (53 )     656  
  Other expenses     672       390       403       1,962       1,671  
  Total noninterest expense     4,744       4,473       4,102       17,974       17,207  
               
  Income (loss) before provision (benefit) for income taxes     2,741       2,909       2,597       10,863       9,904  
                                 
               
  Provision (benefit) for income taxes     458       597       1,056       2,282       3,610  
  Net Income (Loss) $   2,283   $   2,312   $   1,541   $   8,581   $   6,294  
               
  Per Share Data              
  Basic EPS  $   0.28   $   0.29   $   0.19   $   1.06   $   0.78  
  Diluted EPS  $   0.28   $   0.29   $   0.19   $   1.06   $   0.78  
               
   Average shares outstanding             
  Basic      8,065,709       8,065,709       8,044,184       8,060,929       8,039,397  
  Effect of dilutive shares      26,581       27,274       26,340       30,352       18,382  
  Diluted      8,092,290       8,092,983       8,070,524       8,091,281       8,057,779  

 

State Bank Corp.      
Balance Sheets      
         
Dollars in thousands - Unaudited 12/31/2018 9/30/2018 12/31/2017
Consolidated Balance Sheets      
         
Assets      
  Cash and cash equivalents $   4,061   $   4,185   $   3,558  
  Interest bearing deposits     4,106       5,027       6,835  
  Overnight Funds     17,960       21,321       15,111  
  Available for sale securities     179,589       186,291       206,137  
  Total cash and securities     205,716       216,824       231,641  
         
  Loans held for sale, before reserves     2,375       1,256       3,400  
  Gross loans held for investment     407,264       384,233       347,951  
  Loan loss reserve     (3,824 )     (3,736 )     (3,306 )
  Total net loans     405,815       381,753       348,045  
         
  Premises and equipment, net     14,315       14,284       14,561  
  Other real estate owned     266       266       691  
  Federal Home Loan Bank and other stock     6,249       6,512       3,867  
  Company owned life insurance     11,802       11,737       11,543  
  Goodwill and Core Deposit Intangible     7,054       7,141       7,402  
  Other assets     4,120       4,446       2,887  
         
  Total Assets $   655,337   $   642,963   $   620,637  
         
         
Liabilities      
  Non interest bearing demand $   135,485   $   130,901   $   128,870  
  Money market, NOW and savings     362,202       374,492       357,880  
  Time deposits <$250K     51,845       48,014       58,214  
  Time deposits >$250K     8,299       7,545       4,431  
  Total Deposits     557,831       560,952       549,395  
         
  Securities sold under repurchase agreements     5,001       4,404       3,616  
  Federal Home Loan Bank advances     18,000       6,000       -  
  Subordinated debt, net of debt issuance costs     7,045       7,151       7,361  
  Total Debt     30,046       17,555       10,977  
         
  Other Liabilities     3,086       3,481       1,608  
  Total Liabilities     590,963       581,988       561,980  
         
         
Shareholders' Equity      
  Common stock     39,597       39,556       39,333  
  Accumulated retained earnings     27,831       26,032       21,185  
  Accumulated other comprehensive income     (3,054 )     (4,613 )     (1,861 )
  Total shareholders equity     64,374       60,975       58,657  
         
  Total liabilities and shareholders' equity $   655,337   $   642,963   $   620,637  

 

State Bank Corp.          
Five-Quarter Performance Summary          
           
      For the Quarter Ended  
Dollars in thousands - Unaudited 12/31/2018 9/30/2018 6/30/2018 3/31/2018 12/31/2017
Performance Highlights          
             
Earnings:          
  Total revenue (Net int. income + nonint. income) $   7,622   $   7,542   $   7,259   $   6,903   $   6,799  
  Net interest income $   6,060   $   6,190   $   5,873   $   5,518   $   5,579  
  Provision for loan losses $   137   $   160   $   158   $   35   $   100  
  Noninterest income $   1,562   $   1,352   $   1,386   $   1,385   $   1,220  
  Noninterest expense $   4,744   $   4,473   $   4,303   $   4,453   $   4,102  
  Net income (loss) $   2,283   $   2,312   $   2,137   $   1,849   $   1,541  
             
Per Share Data:          
  Net income (loss), basic  $   0.28   $   0.29   $   0.27   $   0.23   $   0.19  
  Net income (loss), diluted  $   0.28   $   0.29   $   0.26   $   0.23   $   0.19  
  Cash dividends declared $   0.06   $   0.06   $   0.06   $   0.06   $   0.04  
  Book value $   7.98   $   7.56   $   7.40   $   7.25   $   7.29  
  Tangible book value $   7.10   $   6.67   $   6.50   $   6.34   $   6.37  
             
Performance Ratios:          
  Return on average assets    1.41 %   1.44 %   1.33 %   1.18 %   0.98 %
  Return on average equity    14.53 %   15.19 %   14.48 %   12.64 %   10.52 %
  Net interest margin, taxable equivalent   4.01 %   4.12 %   3.93 %   3.78 %   3.86 %
  Average cost of funds   0.38 %   0.29 %   0.29 %   0.22 %   0.20 %
  Average yield on loans   5.61 %   5.87 %   5.68 %   5.44 %   5.63 %
  Efficiency ratio   62.24 %   59.31 %   59.28 %   64.51 %   60.33 %
  Non-interest income to total revenue   20.49 %   17.93 %   19.09 %   20.06 %   17.94 %
             
Capital & Liquidity:          
  Total equity to total assets (EOP)   9.82 %   9.48 %   9.30 %   9.26 %   9.45 %
  Tangible equity to tangible assets   8.47 %   8.47 %   8.26 %   8.20 %   8.36 %
  Total loans to total deposits   73.43 %   68.72 %   65.34 %   64.73 %   63.95 %
  State Bank of Arizona          
  Common equity tier 1 ratio   13.18 %   13.49 %   13.83 %   13.98 %   14.03 %
  Tier 1 leverage ratio   10.42 %   10.23 %   9.99 %   9.91 %   9.73 %
  Tier 1 risk based capital   13.18 %   13.49 %   13.83 %   13.98 %   14.03 %
  Total risk based capital    13.94 %   14.26 %   14.63 %   14.75 %   14.80 %
             
Asset Quality:          
  Gross charge-offs $   -   $   77   $   -   $   -   $   26  
  Net charge-offs (NCOs) $   (2 ) $   71   $   (82 ) $   (15 ) $   (173 )
  NCO to average loans, annualized   0.00 %   0.08 %   -0.14 %   -0.02 %   -0.20 %
  Non-accrual loans/securities $   1,391   $   657   $   2,389   $   5,899   $   6,219  
  Other real estate owned $   266   $   266   $   399   $   529   $   691  
  Repossessed assets  $   -   $   -   $   -   $   -   $   -  
  Non-performing assets (NPAs) $   1,657   $   923   $   2,788   $   6,428   $   6,910  
  NPAs to total assets   0.25 %   0.14 %   0.43 %   1.02 %   1.11 %
  Loans >90 days past due $   -   $   -   $   -   $   -   $   -  
  NPAs + 90 days past due $   1,657   $   923   $   2,788   $   6,428   $   6,910  
  NPAs + loans 90 days past due to total assets   0.25 %   0.14 %   0.43 %   1.02 %   1.11 %
  Allowance for loan losses to total loans   0.93 %   0.97 %   0.99 %   0.93 %   0.94 %
  Allowance for loan losses to NPAs   230.78 %   404.77 %   134.00 %   52.21 %   47.84 %
             
Period End Balances:          
  Assets $   655,337   $   642,963   $   641,682   $   630,360   $   620,637  
  Total Loans (before reserves) $   409,639   $   385,489   $   367,125   $   361,435   $   351,351  
  Deposits $   557,831   $   560,952   $   561,902   $   558,414   $   549,395  
  Stockholders' equity $   64,374   $   60,975   $   59,664   $   58,381   $   58,657  
  Common stock market capitalization $   99,208   $   117,759   $   126,632   $   97,023   $   88,084  
  Full-time equivalent employees     124       121       122       117       114  
  Shares outstanding     8,065,709       8,065,709       8,065,709       8,051,677       8,044,184  
             
Average Balances:          
  Assets $   649,673   $   644,250   $   640,327   $   627,504   $   626,759  
  Earning assets $   607,149   $   603,271   $   599,968   $   585,574   $   582,297  
  Total Loans (before reserves) $   400,116   $   377,752   $   369,705   $   355,848   $   349,866  
  Deposits $   560,343   $   562,683   $   562,942   $   556,608   $   556,169  
  Other borrowings $   17,649   $   17,596   $   16,622   $   11,028   $   10,226  
  Stockholders' equity $   62,844   $   60,901   $   59,034   $   58,519   $   58,609  
  Shares outstanding, basic - wtd     8,065,709       8,065,709       8,062,225       8,049,845       8,044,184  
  Shares outstanding, diluted - wtd     8,092,290       8,092,983       8,093,024       8,087,524       8,070,524  


Contact: Brian M. Riley, President & CEO
  Craig Wenner, EVP & CFO
  928 855 0000 
  www.mohavestbank.com

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