State Bank Corp. Reports Third Quarter Results


LAKE HAVASU CITY, Ariz., Oct. 24, 2014 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ) ("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income of $612,000, or $0.10 per diluted share, for the quarter ended September 30, 2014, as compared to net income of $404,000, or $0.07 per diluted share, for the same period of 2013. For the nine months ended September 30, 2014, the Company reported net income of $4,879,000, or $0.83 per diluted share, as compared to a net income of $1,085,000, or $0.18 per diluted share, for the same period of 2013.

Third Quarter 2014 Highlights include:

  • Pre-tax operating income for the quarter was $947,000, an increase of 137 percent from the same period of 2013.
  • New portfolio loan production of $15.5 million during the quarter and $39.6 million for the year.
  • Core deposits increased $13.1 million.
  • Gains from the sale of loans (mortgage, SBA and USDA) totaled $510,000 in the third quarter, nearly double the amount in the same quarter last year.
  • Non-interest expense decreased by $449,000 in the third quarter 2014 compared to the same quarter 2013 as asset quality costs continued to moderate.

"This was another solid quarter. Our net interest income increased due to balance sheet growth. Gains from the sale of loans were sharply higher and we benefited from lower OREO expenses. We look forward to similar results in the fourth quarter to wrap up an excellent year," commented Brian M. Riley, President & CEO.

The Company provided $250,000 to its loan loss reserve during the third quarter of 2014 as total loans increased. Net credit recoveries during the third quarter of 2014 were $19,000 as compared to $62,000 in net credit losses for the same period of 2013.

Nonperforming assets were $17.2 million at September 30, 2014, a decrease of $6.2 million from $23.4 million at December 31, 2013. Nonperforming assets represented 5.43 percent of total assets at September 30, 2014 as compared to 8.15 percent at December 31, 2013. The Classified Asset Ratio fell to 56.8 percent at September 30, 2014 from 89.1 percent at December 31, 2013. The allowance for loan and lease losses totaled $3.2 million, or 1.57 percent of total loans, at September 30, 2014. The Company continues to carefully monitor its level of loss reserves and will proactively make additions as necessary to protect against an uncertain economic environment.

The Company's net interest margin continues to remain strong with third quarter results of 4.19 percent. The main components to this trend are low cost of funding and a better earning asset mix.

As of September 30, 2014, total assets were $317.6 million, an increase of $29.7 million, or 10.4 percent, from $287.9 million at December 31, 2013. Total loans were $202.4 million at September 30, 2014 as compared to $199.4 million at December 31, 2013. Total deposits were $276.7 million at September 30, 2014 as compared to $252.0 million at December 31, 2013.    

Shareholder equity increased to $34.6 million at September 30, 2014 from $29.6 million at December 31, 2013. This resulted from core net operating income and a deferred income tax benefit. The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. The following table provides the Bank's capital ratio at September 30, 2014:

    Ratio to be
  Actual   well 
  Ratio capitalized
Leverage Ratio 10.34% 5.00%
Tier 1 Capital to Risk-Weighted Assets 13.49% 6.00%
Total Capital to Risk-Weighted Assets 14.75% 10.00%

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. 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. and its subsidiary, Mohave State Bank, 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 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.          
Five-Quarter Performance Summary          
           
   For the Quarter Ended 
Dollars in thousands - Unaudited 9/30/2014 6/30/2014 3/31/2014 12/31/2013 9/30/2013
Performance Highlights          
           
Earnings:          
Total revenue (Net int. income + nonint. income)  $ 3,668  $ 3,286  $ 3,278  $ 3,221  $ 3,324
Net interest income  $ 2,793  $ 2,720  $ 2,781  $ 2,653  $ 2,608
Provision for loan losses  $ 250  $ 250  $ 120  $ --  $ --
Noninterest income  $ 875  $ 566  $ 497  $ 568  $ 716
Noninterest expense  $ 2,471  $ 2,478  $ 2,688  $ 2,767  $ 2,920
Net income (loss)  $ 612  $ 3,798  $ 470  $ 454  $ 404
           
Per Share Data:          
Net income (loss), basic   $ 0.10  $ 0.65  $ 0.08  $ 0.08  $ 0.07
Net income (loss), diluted   $ 0.10  $ 0.65  $ 0.08  $ 0.08  $ 0.07
Cash dividends declared  $ --  $ --  $ --  $ --  $ --
Book value  $ 5.89  $ 5.79  $ 5.12  $ 5.04  $ 4.96
Tangible book value  $ 5.89  $ 5.79  $ 5.12  $ 5.04  $ 4.96
           
Performance Ratios:          
Return on average assets  0.79% 5.16% 0.65% 0.64% 0.56%
Return on average equity  7.12% 48.09% 6.28% 6.18% 5.57%
Net interest margin, taxable equivalent 4.19% 4.29% 4.35% 4.24% 4.16%
Average cost of funds 0.22% 0.22% 0.24% 0.27% 0.33%
Average yield on loans 5.31% 5.18% 5.50% 5.23% 5.68%
Efficiency ratio 67.37% 75.41% 82.00% 85.90% 87.85%
Non-interest income to total revenue 23.85% 17.22% 15.16% 17.63% 21.54%
           
Capital & Liquidity:          
Total equity to total assets (EOP) 10.88% 11.25% 10.32% 10.28% 10.16%
Tangible equity to tangible assets 10.88% 11.25% 10.32% 10.28% 10.16%
Total loans to total deposits 73.44% 77.36% 76.17% 79.45% 78.31%
Mohave State Bank          
Tier 1 leverage ratio 10.34% 10.72% 10.52% 10.50% 10.20%
Tier 1 risk based capital 13.49% 13.23% 13.66% 13.33% 13.17%
Total risk based capital  14.75% 14.47% 14.91% 14.58% 14.42%
           
Asset Quality:          
Gross charge-offs  $ --  $ 1,045  $ 110  $ 50  $ 65
Net charge-offs (NCOs)  $ (19)  $ 1,025  $ 45  $ (115)  $ 62
NCO to average loans, annualized -0.04% 2.01% 0.09% -0.23% 0.13%
Non-accrual loans/securities  $ 5,975  $ 6,147  $ 8,617  $ 10,968  $ 9,924
Other real estate owned  $ 11,268  $ 11,693  $ 12,196  $ 12,465  $ 14,386
Repossessed assets   $ --  $ --  $ --  $ --  $ --
Non-performing assets (NPAs)  $ 17,243  $ 17,840  $ 20,813  $ 23,433  $ 24,310
NPAs to total assets 5.43% 5.91% 7.14% 8.14% 8.48%
Loans >90 days past due  $ --  $ --  $ --  $ 39  $ --
NPAs + 90 days past due  $ 17,243  $ 17,840  $ 20,813  $ 23,472  $ 24,310
NPAs + loans 90 days past due to total assets 5.43% 5.91% 7.14% 8.15% 8.48%
Allowance for loan losses to total loans 1.57% 1.44% 1.90% 1.81% 1.78%
Allowance for loan losses to NPAs 18.52% 16.39% 17.77% 15.47% 14.44%
           
Period End Balances:          
Assets  $ 317,648  $ 301,877  $ 291,419  $ 287,857  $ 286,625
Total Loans (before reserves)  $ 203,209  $ 202,897  $ 194,789  $ 200,220  $ 196,888
Deposits  $ 276,716  $ 262,275  $ 255,722  $ 252,004  $ 251,426
Stockholders' equity  $ 34,575  $ 33,961  $ 30,065  $ 29,584  $ 29,120
Common stock market capitalization  $ 27,991  $ 30,396  $ 32,274  $ 26,113  $ 20,538
Full-time equivalent employees  80  76  75  77  80
Shares outstanding  5,868,038  5,868,038  5,868,038  5,868,038  5,868,038
           
Average Balances:          
Assets  $ 309,367  $ 294,282  $ 288,913  $ 284,506  $ 287,844
Earning assets  $ 273,449  $ 260,383  $ 255,530  $ 250,250  $ 251,041
Total Loans (before reserves)  $ 205,025  $ 203,858  $ 198,953  $ 202,641  $ 193,317
Deposits  $ 269,083  $ 257,282  $ 252,563  $ 248,511  $ 253,239
Other borrowings  $ 4,737  $ 4,547  $ 5,584  $ 5,642  $ 4,719
Stockholders' equity  $ 34,365  $ 31,592  $ 29,951  $ 29,395  $ 29,008
Shares outstanding, basic - wtd  5,868,038  5,868,038  5,868,038  5,868,038  5,868,038
Shares outstanding, diluted - wtd  5,868,038  5,868,038  5,868,038  5,868,038  5,868,038
     
State Bank Corp.    
Balance Sheets    
     
     
Dollars in thousands - Unaudited 9/30/2014 12/31/2013
Consolidated Balance Sheets    
     
Assets    
Cash and cash equivalents  $ 1,954  $ 1,634
Interest bearing deposits  3,958  3,360
Overnight Funds  37,900  24,395
Held for maturity securities  30  37
Available for sale securities  36,541  27,420
Total cash and securities  80,383  56,846
     
Loans held for sale, before reserves  2,825  2,554
Gross loans held for investment  202,414  199,444
Loan loss reserve  (3,193)  (3,624)
Total net loans  202,046  198,374
     
Premises and equipment, net  9,906  10,107
Other real estate owned  11,268  12,465
Federal Home Loan Bank and other stock  1,917  1,268
Company owned life insurance  5,830  5,709
Other assets  6,298  3,088
     
Total Assets  $ 317,648  $ 287,857
     
     
Liabilities    
Non interest bearing demand  $ 63,772  $ 58,822
Money market, NOW and savings  150,553  132,082
Time deposits <$100K  31,041  27,599
Time deposits >$100K  31,350  33,501
Total Deposits  276,716  252,004
     
Securities sold under repurchase agreements  4,240  4,864
Federal Home Loan Bank advances  --  --
Subordinated debt  675  675
Total Debt  4,915  5,539
     
Other Liabilities  1,442  730
Total Liabilities  283,073  258,273
     
     
Shareholders' Equity    
Common stock  25,037  25,037
Accumulated retained earnings  9,349  4,470
Accumulated other comprehensive income  189  77
Total shareholders equity  34,575  29,584
     
Total liabilities and shareholders' equity  $ 317,648  $ 287,857
         
State Bank Corp.        
Statement of Operations        
         
   For the Quarter Ended   Year to Date 
Dollars in thousands - Unaudited 9/30/2014 9/30/2013 9/30/2014 9/30/2013
Statements of Operations        
Interest income        
Loans, including fees  $ 2,723  $ 2,647  $ 8,098  $ 8,089
Securities   205  155  604  469
Fed funds and other  18  18  44  53
Total interest income  2,946  2,820  8,746  8,611
         
Interest expense        
Deposits  139  198  411  682
Borrowings  14  14  42  43
Total interest expense  153  212  453  725
         
Net interest income  2,793  2,608  8,293  7,886
         
Provision for loan losses  250  --  620  225
Net interest income after loan loss provision  2,543  2,608  7,673  7,661
         
Noninterest income        
Service charges on deposits  104  106  312  308
Mortgage loan fees  113  113  282  347
Gain on sale of loans  510  231  833  775
(Loss)/Gain on securities  --  --  (42)  33
Other income  148  266  553  751
Total noninterest income  875  716  1,938  2,214
         
Noninterest expense        
Salaries and employee benefits  1,315  1,288  3,923  3,886
Net occupancy expense  97  109  283  281
Equipment expense  39  39  115  126
Data processing  276  278  797  830
Director fees & expenses  41  55  140  151
Insurance  29  65  89  198
Marketing & promotion  82  153  250  378
Professional fees  97  128  399  301
Office expense  30  27  81  86
Regulatory assessments  69  163  330  478
OREO and repossessed assets  247  535  788  1,801
Other expenses  149  80  442  274
Total noninterest expense  2,471  2,920  7,637  8,790
         
Income (loss) before provision (benefit) for income taxes  947  404  1,974  1,085
         
Provision (benefit) for income taxes  335  --  (2,905)  --
Net Income (Loss)  $ 612  $ 404  $ 4,879  $ 1,085
         
         
Per Share Data         
Basic EPS   $ 0.10  $ 0.07  $ 0.83  $ 0.18
Diluted EPS   $ 0.10  $ 0.07  $ 0.83  $ 0.18
         
Average shares outstanding         
Basic   5,868,038  5,868,038  5,868,038  5,868,038
Effect of dilutive shares   --  --  --  --
Diluted   5,868,038  5,868,038  5,868,038  5,868,038


            

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