LAKE HAVASU CITY, Ariz., Feb. 12, 2008 (PRIME NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ), the holding company for Mohave State Bank, announced 2007 fiscal year net income of $5.52 million, a decline of 2.3% from the $5.65 million reported for fiscal year 2006. Earnings per diluted share of $1.42 compare with $1.46 for 2006, down 2.7%. For the fourth quarter of 2007, net income was $1.26 million, a 16% decrease from the $1.50 million reported for the fourth quarter of 2006; fourth quarter 2007 diluted earnings per share were $0.33 compared to $0.39 for the prior-year fourth quarter. Year-over-year comparisons reflect only modest changes in earnings; for both periods, the impact of solid loan growth was offset by contraction of the net interest margin and higher expense levels associated with investments in infrastructure. Quarter-over-quarter earnings were negatively impacted by year-end accrual adjustments.
Highlights include:
* The Company continued its track record of delivering high
performance, with an ROAA of 1.55% and an ROAE of 16.34% for
fiscal year 2007.
* Loans increased $24.2 million, or 10.2%, over the last twelve
months. The majority of this loan growth occurred in
commercial real estate loans, up $27.9 million or 30.1%;
construction loans declined $23.6 million, or 23.9%.
* The Bank experienced an increase in deposit market share in its
headquarters county of Mohave, to 11.3% in 2007 from 10.9% in
2006. Mohave State Bank accounts for the largest deposit market
share among locally-owned banks, and ranks fourth overall in
Mohave County. Core deposits were 80.8% of total deposits at
year-end 2007.
* The new Small Business Administration (SBA) department funded
$2.8 million in loans during 2007 and the Bank expects to receive
its Preferred Lender status during the first part of 2008.
* The Company operates quite efficiently. The efficiency ratio
remains sound overall at 49.81% for fiscal year 2007; however,
the ratio deteriorated during the course of the year to 53.31% as
a result of expansion initiatives.
* 65,766 shares, or 1.7% of outstanding shares were repurchased in
2007 under two repurchase programs of up to 75,000 shares
authorized by the board of directors.
* Cash dividends declared totaled $0.46 per share in 2007, and
returned over 30% of the bank's earnings back to the shareholders
during 2007. Cash dividends declared for 2007 increased 15.0%
over 2006.
President and CEO Ralph Tapscott stated, "This has been an excellent year for our Company, and I am proud of the contribution our employees have made to our success. We have been quick to adapt to the changes in our markets and in our industry, and we have continued to maintain a high level of performance throughout. This performance relates to knowing our customers and knowing our community, and no one can do this as effectively as a community banker. In late 2007, we opened our second banking office in Kingman, Arizona. Kingman has been our fastest growing market and we see significant opportunity ahead."
Income Statement
Total revenue, consisting of net interest income and noninterest income, was $17.8 million for fiscal year 2007, an increase of $582 thousand, or 3.4% over fiscal year 2006. Net interest income increased $435 thousand, or 2.8%, to $15.9 million, reflecting a 10.4% increase in average earning assets partially offset by a 28 basis point decline in the net interest margin to 4.73%. For the fourth quarter of 2007, total revenue was $4.4 million, an increase of $128 thousand, or 3.0% over the year-ago fourth quarter. Net interest income increased $46 thousand, or 1.2% to $3.9 million; the 3.5% increase in average earning assets was partially offset by a 10 basis point decline in the net interest margin. Mr. Tapscott added, "The Bank's fourth quarter net interest margin of 4.65% was still high compared to most banks, and a 10 basis point decline fourth quarter-over-quarter was modest in today's rate environment. We are only slightly asset sensitive and we do not forecast significant pressure on our net interest margin."
Full year 2007 noninterest income was $1.8 million, compared with $1.7 million for the prior year, an increase of $147 thousand, or 8.8%. Service charges on deposits, up $102 thousand or 20.2% over 2006, represent the largest sources of the increase. Mortgage banking income accounted for about $900 thousand or approximately 50% of total noninterest income in both 2006 and 2007.
Noninterest income for the fourth quarter of 2007 was $489 thousand, an increase of $82 thousand or 20.2% from the year-ago quarter. Service charges on deposits, up $57 thousand or 45.2%, were the major contributor to fourth quarter growth, with mortgage banking income providing a 45% contribution to noninterest income. Also, other income, up $20 thousand quarter-over-quarter, is beginning to reflect the recently-introduced SBA program. Mortgage originations were $38.4 million for fiscal year 2007 compared with $40.6 million for 2006. For the fourth quarter alone, they were $9.6 million in 2007, up 4.1% over the year-ago quarter. "Despite the weak housing market this past year, our mortgage team is down only five percent from their best year ever, and the revenue they produce is making a solid contribution to earnings. This group has never ventured into subprime lending, and is now originating and underwriting FHA loans, VA loans and delivering reverse mortgages. We anticipate that their contribution will increase along with improvements in the local housing market."
Noninterest expense for fiscal year 2007 was $8.8 million compared with $8.1 million in fiscal year 2006, an increase of $732 thousand, or 9.0%. The increase in data processing expense, up $367 thousand or 41.6%, was attributable to the completion of several information technology upgrades; employee salaries and benefits grew $251 or 4.9%, as 18 additional employees were added year-over-year (up 24%), reflecting additional staff for the newest branch location in Kingman, expansion of services in Yuma, expansion of the mortgage banking team, and the new SBA lending initiative. Together, these salary and data processing expense categories totaled approximately 84% of the increase in 2007 noninterest expense.
Balance Sheet
Total assets were $352.2 million at December 31, 2007, up $14.1 million or 4.2% from the $338.1 million reported at December 31, 2006. Loans increased $24.7 million or 10.3% to $265.3 million. Commercial real estate (CRE) loans, which accounted for 45% of the 2007 loan portfolio, were the major growth contributor, up $27.9 million or 30.1%, to $120.4 million. Growth in CRE loans virtually offset the $23.6 million or 23.9% decline in construction (C&D) loans, which ended 2007 at $74.9 million, or 28.1% of total loans. For 2006, CRE and C&D loans accounted for 38.3% and 40.8%, respectively, of total loans. "Local real estate within our markets has declined in value, as it has in most of our country," Mr. Tapscott explained. "While 87% of our loans are collateralized by real estate, we made substantial progress this past year replacing construction loans with less risky commercial real estate loans, reducing the risk in our overall portfolio, as demonstrated by the outstanding quality of our loans -- even in these challenging times."
Asset quality remains strong; nonperforming assets were 0.16% of total average assets at December 31, 2007. Mr. Tapscott noted that historical asset quality has always been excellent, primarily because Mohave State Bank's underwriting is very conservative, especially from a loan-to-value perspective. Mr. Tapscott continued, "The overall economy is experiencing some stressful times. We are closely monitoring our credits since most of our loans are real-estate secured. Although we are experiencing an increase in past due loans, we see no significant losses in the portfolio." Net charge-offs were 0.02% of average loans for fiscal year 2007 compared with 0.08% for the prior year. The period-end allowance for loan losses was 1.36% of total loans compared with 1.30% for 2006.
Deposits at December 31, 2007 were $261.3 million, an increase of $8.0 million, or 3.2%, from the $253.3 million reported at December 31, 2006. Core deposits, which exclude time deposits greater than $100 thousand, were $211.2 million at December 31, 2007, accounting for 80.8% of total deposits; the level of core deposits was virtually unchanged from 2006. Mohave State Bank funded over half of its $24.7 million of loan growth through the reduction of its securities portfolio by $14 million; the remaining $10.7 million was primarily funded through deposit growth.
Shareholder equity increased 9.6% to $34.7 million at December 31, 2007, from $31.6 million at December 31, 2006. During the latter half of 2007, the Company repurchased 65,766 shares or 1.7% of outstanding shares of its common stock at a total cost of $1.6 million. Capital ratios remain strong at December 31, 2007, with an equity to asset ratio of 9.84%, far exceeding the 6.00% to qualify as a "well-capitalized" institution.
Mr. Tapscott concluded with a comment on the economy. "Our markets have been experiencing a decline for almost 18 months, largely led by the slowdown in real estate. I believe we led this cycle over much of the country and we expect an early recovery. Despite the adverse banking environment this past year, we grew our loan portfolio in excess of ten percent. We are again positioned to achieve solid loan growth in 2008, focusing on asset quality, core deposits and disciplined control of expenses."
About the Company
State Bank Corp., headquartered in Lake Havasu City, Arizona, is the parent company of Mohave State Bank, the largest locally-owned bank in Mohave County, with $352 million in assets as of December 31, 2007. Mohave State Bank 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. The Bank has six full-service branches: two in Lake Havasu City, two in Kingman, one in Bullhead City, and one in Yuma, Arizona. The Company is traded over-the-counter as SBAZ. For further information, please visit the web site: www.mohavestbank.com
Forward-looking Statements
This press release may include forward-looking statements about State Bank Corp. (the "Company") for which the Company claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the corporation'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, credit quality of borrowers, 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.
State Bank Corp.
Five-Quarter Performance Summary
For the Quarter Ended For the Year Ended
--------------------- --------------------
Dollars in thousands 12/31/ 12/31/ 12/31/ 12/31/
2007 2006 2007 2006
------------------------------------------------ --------------------
Performance Highlights
Earnings:
Total revenue (Net int
income + nonint. income) $ 4,382 $ 4,254 $ 17,762 $ 17,180
Net interest income $ 3,893 $ 3,847 $ 15,936 $ 15,501
Provision for loan losses $ 65 $ 120 $ 520 $ 455
Noninterest income $ 489 $ 407 $ 1,826 $ 1,679
Noninterest expense $ 2,336 $ 1,813 $ 8,848 $ 8,116
Net income $ 1,285 $ 1,501 $ 5,521 $ 5,649
Per Share Data:
Net income, basic $ 0.33 $ 0.39 $ 1.43 $ 1.46
Net income before
extraordinary items,
diluted $ 0.33 $ 0.39 $ 1.42 $ 1.46
Net income, diluted $ 0.33 $ 0.39 $ 1.42 $ 1.46
Cash dividends declared $ 0.16 $ 0.16 $ 0.46 $ 0.40
Book value $ 9.03 $ 8.17 $ 9.03 $ 8.17
Tangible book value $ 9.03 $ 8.17 $ 9.03 $ 8.17
Performance Ratios:
Return on average assets 1.45% 1.77% 1.55% 1.74%
Return on average equity 14.74% 18.99% 16.34% 19.15%
Return on average tangible
assets 1.45% 1.77% 1.55% 1.74%
Return on average tangible
equity 14.74% 18.99% 16.34% 19.15%
Net interest margin 4.65% 4.75% 4.73% 5.01%
Average cost of funds 3.06% 3.03% 3.01% 2.41%
Average yield on loans 8.57% 8.87% 8.32% 7.94%
Efficiency ratio 53.31% 42.62% 49.81% 47.24%
Non-interest income to
total revenue 11.16% 9.57% 10.28% 9.77%
Capital & Liquidity:
Total equity to total
assets (EOP) 9.84% 9.35% 9.84% 9.35%
Tangible equity to
tangible assets 9.84% 9.35% 9.84% 9.35%
Total loans to total
deposits 101.55% 94.99% 101.55% 94.99%
Regulatory Capital 9.85% 9.45% 9.61% 9.30%
Tier 1 Capital 11.76% 12.12% 12.05% 11.96%
Risk Based Capital 12.95% 13.08% 13.14% 12.85%
Asset Quality:
Gross charge-offs $ 55 $ 174 $ 55 $ 174
Net charge-offs (NCOs) $ 46 $ 174 $ 46 $ 174
NCO to average loans,
annualized 0.07% 0.29% 0.02% 0.08%
Non-accrual loans $ 553 $ -- $ 553 $ --
Other real estate owned $ -- $ -- $ -- $ --
Repossessed assets $ -- $ -- $ -- $ --
Non-performing assets
(NPAs) $ 553 $ -- $ 553 $ --
NPAs to total average
assets 0.16% 0.00% 0.16% 0.00%
Loans greater than 90
days past due $ -- $ -- $ -- $ --
NPAs + 90 days past due $ 553 $ -- $ 553 $ --
NPAs + loans 90 days past
due to total assets 0.16% 0.00% 0.16% 0.00%
Allowance for loan losses
to total loans 1.36% 1.30% 1.36% 1.30%
Allowance for loan losses
to NPAs 653.35% 0.00% 653.35% 0.00%
Period End Balances:
Assets $ 352,236 $ 338,142 $ 352,236 $ 338,142
Total Loans (before
reserves) $ 265,298 $ 240,589 $ 265,298 $ 240,589
Deposits $ 261,256 $ 253,282 $ 261,256 $ 253,282
Stockholders' equity $ 34,658 $ 31,630 $ 34,658 $ 31,630
Market capitalization $ 93,032 $ 96,886 $ 93,032 $ 96,886
Full-time equivalent
employees 92 74 92 74
Shares outstanding 3,836,351 3,872,331 3,836,351 3,872,331
Average Balances:
Assets $ 355,297 $ 338,385 $ 355,719 $ 324,846
Earning assets $ 335,168 $ 323,714 $ 340,139 $ 308,185
Total loans (before
reserves) $ 260,504 $ 241,842 $ 252,647 $ 222,482
Deposits $ 272,507 $ 252,458 $ 277,340 $ 262,743
Repurchase agreements $ 28,611 $ 22,205 $ 30,709 $ 21,726
Borrowings $ 12,659 $ 30,370 $ 10,897 $ 9,353
Stockholders' equity $ 34,873 $ 31,619 $ 33,786 $ 29,491
State Bank Corp.
Balance Sheet
For the Year Ended
-------------------------------------
12/31/ 12/31/ $ %
Dollars in thousands 2007 2006 -----------------
------------------------------- ------------------ Change Change
Consolidated Balance Sheet -----------------
Assets
Cash and cash equivalents $ 5,458 $ 6,980 $ (1,522) -21.81%
Trading account securities
Held to maturity securities 10,033 17,823 -7,790 -43.71%
Available for sale securities 54,275 58,952 -4,677 -7.93%
------------------ -----------------
Total cash and securities 69,766 83,755 -13,989 -16.70%
Loans, net of unearned income $265,298 $240,589 24,709 10.27%
Loan loss reserve (3,613) (3,139) -474 15.10%
------------------ -----------------
Total net loans 261,685 237,450 24,235 10.21%
Premises and equipment, net $ 10,124 $ 6,271 3,853 61.44%
Deferred taxes 1,595 1,606 -11 -0.68%
Federal home loan bank and other
bank stock 1,677 2,032 -355 -17.47%
Company owned life insurance 4,775 4,601 174 3.78%
Accrued interest and other
assets 2,614 2,427 187 7.70%
------------------ -----------------
Total Assets $352,236 $338,142 14,094 4.17%
================== =================
Liabilities
Non interest bearing demand $ 48,966 $ 58,493 -9,527 -16.29%
Money market, NOW and savings 131,830 123,733 8,097 6.54%
Time deposits less than $100K 30,405 29,392 1,013 3.45%
Time deposits greater than $100K 50,055 41,664 8,391 20.14%
------------------ -----------------
Total Deposits 261,256 253,282 7,974 3.15%
------------------ -----------------
Securities sold under repurchase
agreements 23,027 19,190 3,837 19.99%
Federal home loan bank
borrowings 31,185 32,100 -915 -2.85%
------------------ -----------------
Total Debt 54,212 51,290 2,922 5.70%
Accrued interest and other
liabilities 2,110 1,940 170 8.76%
------------------ -----------------
Total Liabilities $317,578 $306,512 11,066 3.61%
================== =================
Shareholders' Equity
Common stock, no par value,
20,000,000 shares authorized;
3,836,351 and 3,872,331 shares
issued and outstanding at
December 31, 2007 and
December 31, 2006,
respectively $ 21,206 $ 21,013 193 0.92%
Retained Earnings 13,477 11,015 2,462 22.35%
Accumulated other comprehensive
income, net (25) (398) 373 -93.72%
------------------ -----------------
Total shareholders' equity $ 34,658 $ 31,630 3,028 9.57%
------------------ -----------------
Total Liabilities and
Shareholders' Equity $352,236 $338,142 14,094 4.17%
================== =================
State Bank Corp.
Income Statement
For the Quarter Ended
-------------------------------------------
Dollars in thousands $ %
------------------------- ---------- ---------- -------------------
Condensed Statements of
Income 12/31/2007 12/31/2006 Change Change
---------- ---------- -------------------
Interest income
Loans, including fees $ 5,581 $ 5,336 $ 245 4.59%
Securities 678 791 (113) -14.29%
Interest on Fed Funds
Sold and Other 37 30 7 23.33%
---------- ---------- -------------------
Total interest income 6,296 6,157 139 2.26%
---------- ---------- -------------------
Interest expense
Deposits 1,993 1,671 322 19.27%
Borrowings 410 639 (229) -35.84%
---------- ---------- -------------------
Total interest expense 2,403 2,310 93 4.03%
---------- ---------- -------------------
Net interest income 3,893 3,847 46 1.20%
---------- ---------- -------------------
Provision for loan
losses 65 120 (55) -45.83%
---------- ---------- -------------------
Net interest income
after loan loss
provision 3,828 3,727 101 2.71%
---------- ---------- -------------------
Noninterest income
Service charges on
deposits 183 126 57 45.24%
Mortgage Loan Fees 40 48 (8) -16.67%
Gain/losses on sale of
loans 180 167 13 7.78%
Other income 86 66 20 30.30%
---------- ---------- -------------------
Total recurring
noninterest income 489 407 82 20.15%
---------- ---------- -------------------
Noninterest expense
Salaries and employee
benefits 1,322 1,026 296 28.85%
Occupancy expenses 81 78 3 3.85%
Equipment & furniture
expenses 73 63 10 15.87%
Data Processing 359 214 145 67.76%
Director Fees and
expenses 118 84 34 40.48%
Insurance 16 13 3 23.08%
Marketing & promo 137 116 21 18.10%
Professional fees 57 51 6 11.76%
Office Expenses 75 63 12 19.05%
Regulatory Assessments 30 8 22 275.00%
Other expenses 68 97 (29) -29.90%
---------- ---------- -------------------
Total recurring
noninterest expense 2,336 1,813 523 28.85%
---------- ---------- -------------------
Income before income
taxes 1,981 2,321 (340) -14.65%
---------- ---------- -------------------
Income taxes 696 820 (124) -15.12%
---------- ---------- -------------------
Net Income $ 1,285 $ 1,501 (216) -14.39%
========== ========== ===================
Per Share Data
Basic EPS $ 0.33 $ 0.39 (0.06) -14.92%
Diluted EPS $ 0.33 $ 0.39 (0.06) -15.21%
Average shares
outstanding
Basic 3,872,562 3,869,180 3,382 0.09%
Effect of dilutive
stock options 13,509 17,545 (4,036) -23.00%
---------- ---------- -------------------
Diluted 3,886,071 3,886,725 (654) -0.02%
---------- ---------- -------------------
For the Year Ended
-------------------------------------------
Dollars in thousands $ %
------------------------- ---------- ---------- -------------------
Condensed Statements of
Income 12/31/2007 12/31/2006 Change Change
---------- ---------- -------------------
Interest income
Loans, including fees $ 22,084 $ 19,113 $ 2,971 15.54%
Securities 2,904 3,150 -246 -7.81%
Interest on Fed Funds
Sold and Other 553 311 242 77.81%
---------- ---------- -------------------
Total interest income 25,541 22,574 2,967 13.14%
---------- ---------- -------------------
Interest expense
Deposits 7,930 5,686 2,244 39.47%
Borrowings 1,675 1,387 288 20.76%
---------- ---------- -------------------
Total interest expense 9,605 7,073 2,532 35.80%
---------- ---------- -------------------
Net interest income 15,936 15,501 435 2.81%
---------- ---------- -------------------
Provision for loan
losses 520 455 65 14.29%
---------- ---------- -------------------
Net interest income
after loan loss
provision 15,416 15,046 370 2.46%
---------- ---------- -------------------
Noninterest income
Service charges on
deposits 608 506 102 20.16%
Mortgage Loan Fees 162 327 (165) -50.46%
Gain/losses on sale of
loans 740 580 160 27.59%
Other income 316 266 50 18.80%
---------- ---------- -------------------
Total recurring
noninterest income 1,826 1,679 147 8.76%
---------- ---------- -------------------
Noninterest expense
Salaries and employee
benefits 5,349 5,098 251 4.92%
Occupancy expenses 292 258 34 13.18%
Equipment & furniture
expenses 231 243 (12) -4.94%
Data Processing 1,250 883 367 41.56%
Director Fees and
expenses 436 368 68 18.48%
Insurance 51 61 (10) -16.39%
Marketing & promo 466 457 9 1.97%
Professional fees 178 230 (52) -22.61%
Office Expenses 257 239 18 7.53%
Regulatory Assessments 51 30 21 70.00%
Other expenses 287 249 38 15.26%
---------- ---------- -------------------
Total recurring
noninterest expense 8,848 8,116 732 9.02%
---------- ---------- -------------------
Income before income
taxes 8,394 8,609 (215) -2.50%
---------- ---------- -------------------
Income taxes 2,873 2,960 (87) -2.94%
---------- ---------- -------------------
Net Income $ 5,521 $ 5,649 (128) -2.27%
========== ========== ===================
Per Share Data
Basic EPS $ 1.43 $ 1.46 (0.04) -2.67%
Diluted EPS $ 1.42 $ 1.46 (0.04) -2.61%
Average shares
outstanding
Basic 3,872,562 3,856,407 16,155 0.42%
Effect of dilutive
stock options 13,509 15,947 (2,438) -15.29%
---------- ---------- -------------------
Diluted 3,886,071 3,872,354 13,717 0.35%
---------- ---------- -------------------
State Bank Corp.
Deposit and Loan Mix
For the Year Ended
-----------------------------------------
Dollars in thousands 12/31/2007 12/31/2006 $ %
---------------------------------------------------------------------
Deposit and Loan Mix Change Change
------------------
Deposit Breakout
Non interest bearing demand $ 48,966 $ 58,493 $ (9,527) -16.29%
Interest bearing NOW 18,825 19,957 (1,132) -5.67%
Savings 3,802 5,178 (1,376) -26.57%
Money market 109,203 98,598 10,605 10.76%
Time deposits less than
$100K 30,405 29,392 1,013 3.45%
Time deposits greater than
$100K 50,055 41,664 8,391 20.14%
----------------------------------------
Total deposits $ 261,256 $ 253,282 $ 7,974 3.15%
Loan Breakout
Commercial $ 33,912 $ 24,565 $ 9,347 38.05%
Real Estate - Construction 74,917 98,492 (23,575) -23.94%
Real Estate - Residential 34,958 23,751 11,207 47.19%
Real Estate - Commercial 120,371 92,511 27,860 30.12%
Consumer 1,860 1,995 (135) -6.77%
----------------------------------------
Total loans $ 266,018 $ 241,314 $ 24,704 10.24%
Fixed/Variable Rate Loans
Fixed rate loans $ 166,086 $ 161,966 $ 4,120 2.54%
Variable rate loans 99,932 79,348 20,584 25.94%
----------------------------------------
Net deferred fees/costs (720) (725) 5 -0.69%
----------------------------------------
Total loans $ 265,298 $ 240,589 $ 24,709 27.80%