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CST: 21/05/2019 16:40:43   

State Bank Corp. Reports Earnings of $1.82 million, or $0.22 per Diluted Share, in 1Q19; Opens Full Service Branch in Phoenix, Arizona

25 Days ago

LAKE HAVASU CITY, Ariz., April 26, 2019 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCPINK:SBAZ)(“Company”), the holding company for State Bank of Arizona (“Bank”), today announced net income of $1.82 million, or $0.22 per diluted share, for the first quarter ended March 31, 2019, as compared to net income of $1.85 million, or $0.23 per diluted share, for the first quarter of 2018.  In the preceding quarter, the Company reported earnings of $2.28 million, or $0.28 per diluted share. 

“Our first quarter financial results were highlighted by strong loan and core deposit growth and solid net interest income,” stated Brian M. Riley, President and Chief Executive Officer.  “Another highlight of the quarter was the opening of our first full service branch in Phoenix, following the success of our loan production office opened there in May 2018.  The continued focus on delivering value to our clients combined with the strength of the economy in the Arizona markets we serve continues to sustain and build our community banking franchise.” 

First Quarter 2019 Financial Highlights:

• Net income was $1.82 million, or $0.22 per diluted share.

• Opens full service branch in Phoenix, Arizona.

• Return on average assets of 1.02%.

• Return on average equity of 11.06%.

• Core deposits comprised 86.7% of total deposits.

• Tangible book value increased 17.0% to $7.42 per share from $6.34 per share a year earlier.

Net interest margin was 3.95% in the first quarter 2019 compared to 4.01% in the preceding quarter and 3.78% in the first quarter a year ago.  Average cost of funds rose to 54 basis points, as the Company increased overall deposit rates to remain competitive in the market place.

The provision for loan losses was $300,000 during the first quarter of 2019, with net recoveries of $15,000.  The allowance for loan losses totaled $4.1 million at March 31, 2019, or 0.99% of total loans.  Excluding acquired loans, the reserve ratio was 1.08%, which is in line with industry peers.  On the acquired portfolio, the credit component of the loan purchase discount remains greater than an imputed reserve.

Total assets were $673.3 million at March 31, 2019, an increase of $18.0 million, or 2.75%, from $655.3 million at December 31, 2018 and an increase of $42.9 million, or 6.81%, compared to $630.4 million a year ago.  Total loans held for investment were $411.2 million as compared to $407.3 million at December 31, 2018 and $358.8 million at March 31, 2018. 

Total deposits were $585.7 million, an increase of $27.9 million, or 5.00%, from $557.8 million at December 31, 2018 and an increase of $27.3 million, or 4.89%, compared to $558.4 million a year ago.  Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased 2.03% compared to three months earlier and increased 1.76% compared to a year earlier to $507.8 million at March 31, 2019.  Core deposits now comprise 86.7% of total deposits. 

Nonperforming assets were $1.5 million at March 31, 2019, an 11.76% decrease from $1.7 million at December 31, 2018.  Nonperforming assets represented 0.22% of total assets at March 31, 2019. 

Shareholder equity increased to $66.9 million at March 31, 2019, from $64.4 million at December 31, 2018.  At March 31, 2019, tangible book value per share was $7.42 per share compared to $7.10 per share at December 31, 2018.

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 March 31, 2019:

Common Equity Tier 1 Capital Ratio 13.49%
Tier 1 Leverage Ratio 10.39%
Tier 1 Capital Ratio 13.49%
Total Capital Ratio 14.32% 

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 website: 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. Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the Company's possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, borrower capacity to repay, operational factors and competition in the geographic and business areas in which the Company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.

UNAUDITED FINANCIAL STATEMENTS FOLLOW

State Bank Corp.      
Statement of Operations      
         
      For the Quarter Ended  
Dollars in thousands - Unaudited 3/31/2019 12/31/2018 3/31/2018
Statements of Operations      
  Interest income      
  Loans, including fees $   5,926   $   5,612   $   4,842
  Securities      809       891       897
  Fed funds and other     166       100       90
  Total interest income     6,901       6,603       5,829
                   
         
  Interest expense      
  Deposits     544       338       206
  Borrowings     262       205       105
  Total interest expense     806       543       311
                   
         
   Net interest income     6,095       6,060       5,518
                   
                   
                   
         
   Provision for loan losses     300       137       35
   Net interest income after loan loss provision     5,795       5,923       5,483
                   
                   
                   
         
  Noninterest income      
    Service charges on deposits     178       190       148
    Mortgage loan fees     233       394       247
    Gain on sale of loans     390       360       442
  Other income     483       618       548
  Total noninterest income     1,284       1,562       1,385
                   
                   
                   
         
  Noninterest expense      
  Salaries and employee benefits     2,919       2,892       2,695
  Net occupancy expense     192       195       183
  Equipment expense     71       91       92
  Data processing     532       525       440
  Director fees & expenses     76       133       80
  Insurance     35       36       39
  Marketing & promotion     160       82       129
  Professional fees     81       98       149
  Office expense     81       62       38
  Regulatory assessments     56       53       64
  OREO and repossessed assets     82       (95 )     42
  Other expenses     481       672       502
    Total noninterest expense     4,766       4,744       4,453
                   
         
         
  Income (loss) before provision (benefit) for income taxes     2,313       2,741       2,415
                   
                   
         
  Provision (benefit) for income taxes     489       458       566
  Net Income (Loss) $   1,824   $   2,283   $   1,849
                   
                   
         
         
  Per Share Data        
   Basic EPS  $   0.23   $   0.28   $   0.23
   Diluted EPS  $   0.22   $   0.28   $   0.23
         
   Average shares outstanding       
   Basic      8,075,764       8,065,709       8,049,845
   Effect of dilutive shares      32,659       26,581       37,679
   Diluted      8,108,423       8,092,290       8,087,524
                   
         


State Bank Corp.      
Balance Sheets      
       
         
Dollars in thousands - Unaudited 3/31/2019 12/31/2018 3/31/2018
Consolidated Balance Sheets      
         
Assets      
  Cash and cash equivalents $   4,319   $   4,061   $   4,419  
  Interest bearing deposits     8,376       4,106       6,658  
  Overnight Funds     34,030       17,960       21,055  
  Available for sale securities     170,374       179,589       199,932  
  Total cash and securities     217,099       205,716       232,064  
         
  Loans held for sale, before reserves     6,174       2,375       2,624  
  Gross loans held for investment     411,159       407,264       358,811  
  Loan loss reserve     (4,139 )     (3,824 )     (3,356 )
  Total net loans     413,194       405,815       358,079  
         
  Premises and equipment, net     15,171       14,315       14,152  
  Other real estate owned     174       266       528  
  Federal Home Loan Bank and other stock     6,183       6,249       3,867  
  Company owned life insurance     11,360       11,802       11,607  
  Other assets     10,155       11,174       10,063  
                     
         
  Total Assets $   673,336   $   655,337   $   630,360  
                     
                     
         
         
Liabilities      
  Non interest bearing demand $   136,761   $   135,485   $   126,307  
  Money market, NOW and savings     371,021       362,202       372,706  
  Time deposits <$250K     60,417       51,845       54,811  
  Time deposits >$250K     17,533       8,299       4,590  
  Total Deposits     585,732       557,831       558,414  
                     
                     
         
  Securities sold under repurchase agreements     5,176       5,001       4,339  
  Federal Home Loan Bank advances     6,000       18,000       -  
  Subordinated debt, net of debt issuance costs     6,953       7,045       7,367  
  Total Debt     18,129       30,046       11,706  
         
  Other Liabilities     2,556       3,086       1,859  
  Total Liabilities     606,417       590,963       571,979  
         
         
Shareholders' Equity      
    Common stock     3,976       39,597       39,466  
    Accumulated retained earnings     64,835       27,831       22,551  
    Accumulated other comprehensive income     (1,892 )     (3,054 )     (3,636 )
  Total shareholders equity     66,919       64,374       58,381  
         
  Total liabilities and shareholders' equity $   673,336   $   655,337   $   630,360  


State Bank Corp.          
Five-Quarter Performance Summary          
           
      For the Quarter Ended  
Dollars in thousands - Unaudited 3/31/2019 12/31/2018 9/30/2018 6/30/2018 3/31/2018
Performance Highlights          
             
Earnings:          
  Total revenue (Net int. income + nonint. income) $   7,379   $   7,622   $   7,542   $   7,259   $   6,903  
  Net interest income $   6,095   $   6,060   $   6,190   $   5,873   $   5,518  
  Provision for loan losses $   300   $   137   $   160   $   158   $   35  
  Noninterest income $   1,284   $   1,562   $   1,352   $   1,386   $   1,385  
  Noninterest expense $   4,766   $   4,744   $   4,473   $   4,303   $   4,453  
  Net income (loss) $   1,824   $   2,283   $   2,312   $   2,137   $   1,849  
             
Per Share Data:          
  Net income (loss), basic  $   0.23   $   0.28   $   0.29   $   0.27   $   0.23  
  Net income (loss), diluted  $   0.22   $   0.28   $   0.29   $   0.26   $   0.23  
  Cash dividends declared $   0.075   $   0.06   $   0.06   $   0.06   $   0.06  
  Book value $   8.28   $   7.98   $   7.56   $   7.40   $   7.25  
  Tangible book value $   7.42   $   7.10   $   6.67   $   6.50   $   6.34  
             
Performance Ratios:          
  Return on average assets    1.02 %   1.41 %   1.44 %   1.33 %   1.18 %
  Return on average equity    11.06 %   14.53 %   15.19 %   14.48 %   12.64 %
  Net interest margin, taxable equivalent   3.95 %   4.01 %   4.12 %   3.93 %   3.78 %
  Average cost of funds   0.54 %   0.38 %   0.29 %   0.29 %   0.22 %
  Average yield on loans   5.70 %   5.61 %   5.87 %   5.68 %   5.44 %
  Efficiency ratio   64.59 %   62.24 %   59.31 %   59.28 %   64.51 %
  Non-interest income to total revenue   17.40 %   20.49 %   17.93 %   19.09 %   20.06 %
             
Capital & Liquidity:          
  Total equity to total assets (EOP)   9.94 %   9.82 %   9.48 %   9.30 %   9.26 %
  Tangible equity to tangible assets   9.00 %   8.84 %   8.47 %   8.26 %   8.20 %
  Total loans to total deposits   71.25 %   73.43 %   68.72 %   65.34 %   64.73 %
  State Bank of Arizona          
  Common equity tier 1 ratio   13.49 %   13.18 %   13.49 %   13.83 %   13.98 %
  Tier 1 leverage ratio   10.39 %   10.42 %   10.23 %   9.99 %   9.91 %
  Tier 1 risk based capital   13.49 %   13.18 %   13.49 %   13.83 %   13.98 %
  Total risk based capital    14.32 %   13.94 %   14.26 %   14.63 %   14.75 %
             
Asset Quality:          
  Gross charge-offs $   88   $   -   $   77   $   -   $   -  
  Net charge-offs (NCOs) $   (15 ) $   (2 ) $   71   $   (82 ) $   (15 )
  NCO to average loans, annualized   -0.01 %   0.00 %   0.08 %   -0.14 %   -0.02 %
  Non-accrual loans/securities $   1,302   $   1,391   $   657   $   2,389   $   5,899  
  Other real estate owned $   174   $   266   $   266   $   399   $   529  
  Repossessed assets  $   -   $   -   $   -   $   -   $   -  
  Non-performing assets (NPAs) $   1,476   $   1,657   $   923   $   2,788   $   6,428  
  NPAs to total assets   0.22 %   0.25 %   0.14 %   0.43 %   1.02 %
  Loans >90 days past due $   -   $   -   $   -   $   -   $   -  
  NPAs + 90 days past due $   1,476   $   1,657   $   923   $   2,788   $   6,428  
  NPAs + loans 90 days past due to total assets   0.22 %   0.25 %   0.14 %   0.43 %   1.02 %
  Allowance for loan losses to total loans   0.99 %   0.93 %   0.97 %   0.99 %   0.93 %
  Allowance for loan losses to NPAs   280.42 %   230.78 %   404.77 %   134.00 %   52.21 %
             
Period End Balances:          
  Assets $   673,336   $   655,337   $   642,963   $   641,682   $   630,360  
  Total Loans (before reserves) $   417,333   $   409,639   $   385,489   $   367,125   $   361,435  
  Deposits $   585,732   $   557,831   $   560,952   $   561,902   $   558,414  
  Stockholders' equity $   66,919   $   64,374   $   60,975   $   59,664   $   58,381  
  Common stock market capitalization $   104,646   $   99,208   $   117,759   $   126,632   $   97,023  
  Full-time equivalent employees     122       124       121       122       117  
  Shares outstanding     8,080,791       8,065,709       8,065,709       8,065,709       8,051,677  
             
Average Balances:          
  Assets $   715,225   $   649,673   $   644,250   $   640,327   $   627,504  
  Earning assets $   620,445   $   607,149   $   603,271   $   599,968   $   585,574  
  Total Loans (before reserves) $   415,998   $   400,116   $   377,752   $   369,705   $   355,848  
  Deposits $   562,399   $   560,343   $   562,683   $   562,942   $   556,608  
  Other borrowings $   33,995   $   17,649   $   17,596   $   16,622   $   11,028  
  Stockholders' equity $   65,986   $   62,844   $   60,901   $   59,034   $   58,519  
  Shares outstanding, basic - wtd     8,075,764       8,065,709       8,065,709       8,062,225       8,049,845  
  Shares outstanding, diluted - wtd     8,108,423       8,092,290       8,092,983       8,093,024       8,087,524  


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

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