LAKE HAVASU CITY, Ariz., July 29, 2008 (PRIME NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ), the holding company for Mohave State Bank, announced second quarter 2008 net income of $1.25 million, a decline of $192,000, or 13.4 percent, from the $1.44 million reported for second quarter 2007. Earnings per diluted share were $0.32 compared with $0.37 for the prior-year second quarter, down 13.5 percent. For the first six months of 2008, net income was $2.3 million, or $0.60 per diluted share, compared to first half 2007 earnings of $2.8 million, or $0.73 per diluted share, down 17.9 percent and 17.8 percent, respectively.
Second quarter 2008 highlights include:
* An increase in second quarter net income of $181,000, or 17.0
percent, from $1.06 million in the first quarter of 2008.
Earnings per diluted share increased $0.04, or 14.3 percent, from
$0.28 in the first quarter of 2008 driven by an improvement in
net interest income.
* A 27 basis point rebound in the second quarter net interest
margin to 4.69 percent from its first quarter low of 4.42
percent. The margin still remains 29 basis points lower than the
year-earlier quarter.
* Strong loan growth, up $28.8 million, or 11.5 percent, over the
past twelve months, and a 4.1 percent increase from the linked
quarter, to $279.2 million at June 30, 2008. Primary growth
sectors include residential real estate and commercial real
estate.
President and CEO Ralph Tapscott stated, "Our second quarter results reflect a stabilization of the pricing relationship between assets and liabilities following a series of interest rate cuts that began in 2007. While profits still lag the year-earlier quarter, we are pleased with the rebound in our net interest margin, net interest income and net income compared with the first quarter of this year. We are finding solid opportunities for loan and fee-based growth, but are decidedly conservative in what we choose to pursue. In addition, we originated and sold $3.7 million of SBA and USDA loans, which contributed to our noninterest income gains."
The returns on average assets and equity for the second quarter of 2008 were 1.40 percent and 13.78 percent, respectively, compared with 1.21 percent and 11.91 percent for first quarter 2008 and 1.63 percent and 17.68 percent for the year-ago quarter.
Results from Operations
Total revenue, consisting of net interest income and noninterest income, was $4.45 million for the second quarter 2008, down $210,000, or 4.5 percent, from the second quarter of 2007. Year over year, net interest income decreased $223,000, or 5.4 percent, to $3.9 million, reflecting a 29 basis point decline in the net interest margin to 4.69 percent, partially offset by a $1.6 million increase in average earning assets. On a linked quarter basis, total revenue increased $337,000, or 8.2 percent, from $4.11 million in the first quarter of 2008.
Noninterest income for the second quarter of 2008 was $503,000, compared with $490,000 for the year-ago quarter, an increase of $13,000, or 2.7 percent. Service charges on deposits grew by $31,000 from the expansion of product and service offerings and the addition of new customer relationships. "Our goal is to add value through a diversified mix of banking products and services, such as mortgage banking and SBA lending. We had a relatively strong quarter in both of these profit centers," commented Mr. Tapscott.
Noninterest expense for the second quarter of 2008 was $2.36 million, compared with $2.24 million for the prior-year quarter, up $128,000, or 5.7 percent. This increase reflects an investment in infrastructure over the past year, such as opening the new Kingman branch and enhancing our technology capabilities. The 2008 second quarter efficiency ratio was 53.15 percent, compared to 56.34 percent for the linked quarter and 48.00 percent for the year-ago quarter.
Balance Sheet
Total assets were $359.1 million at June 30, 2008, up $14.2 million, or 4.1 percent, from the $344.9 million reported at June 30, 2007. Total loans increased $28.8 million or 11.5 percent year over year, to $279.2 million. Commercial real estate loans (CRE), which totaled $121.3 million or 43.4 percent of the overall loan portfolio at June 30, 2008, continues to be a major growth contributor, up $14.6 million, or 13.7 percent, over the past twelve months. Residential loans, which totaled $43.1 million or 15.4 percent of the loan portfolio at June 30, 2008, grew $16.7 million. Growth in these two loan categories was partially offset by a $5.0 million, or 5.9 percent, decrease in construction and development loans (C&D) to $79.9 million or 28.6 percent of the loan portfolio. Mr. Tapscott noted, "While we have experienced weakening real estate conditions in our markets over the last two years, recent data points suggest that conditions are beginning to stabilize. We nevertheless remain cautious in our loan underwriting and focused principally on relationship lending."
Nonperforming assets at June 30, 2008 were $4.3 million, or 1.20 percent of total assets; there were no nonperforming assets at June 30, 2007. Nonperforming assets consist primarily of one residential development project. Net charge-offs for the second quarter 2008 were $72,000, or 0.11 percent of annualized average loans, compared with net charge-offs of $33,000 (0.05 percent of annualized average loans) for the year-ago quarter. The quarter-end allowance for loan losses was 1.35 percent of total loans, compared with 1.39 percent for prior-year quarter end.
Deposits at June 30, 2008 were $282.1 million, an increase of $9.3 million, or 3.4 percent, from the $272.9 million reported at June 30, 2007. Noninterest-bearing deposits increased $12.5 million, or 20.7 percent over the past twelve months. Growth in noninterest-bearing deposits was partially offset by decreased NOW, Savings, and Time deposits, down $1.9 million, $250,000, and $1.1 million, respectively, over the past twelve months. "Our core deposits remain a large part of our deposit mix and continue to reflect our strong local franchise," commented Mr. Tapscott. "Core deposit levels increased in each of the two last quarters. In addition, we recently joined the CDARS network, a program though which customers can access higher deposit insurance limits."
Shareholder equity increased 9.0 percent to $36.3 million at June 30, 2008 from $33.3 million at June 30, 2007. Mohave State Bank exceeds regulatory standards to qualify as a "well-capitalized" institution at June 30, 2008 with a risk-based capital ratio of 12.81 percent.
Mr. Tapscott concluded, "During these challenging times within the banking industry, we are fortunate that our performance remains positive. The commitment of Mohave State Bank has always been to deliver quality service and competitive financial products within our communities. We value the long-term relationships that we have with our customers and believe this is a source of strength during difficult times."
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. (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
-----------------------------------------------------
Dollars in
thousands 6/30/2008 3/31/2008 12/31/2007 9/30/2007 6/30/2007
---------------------------------------------------------------------
Performance Highlights
Earnings:
Total revenue
(Net int. in-
come + nonint.
income) $ 4,446 $ 4,109 $ 4,382 $ 4,502 $ 4,656
Net interest
income $ 3,943 $ 3,639 $ 3,893 $ 4,049 $ 4,166
Provision for
loan losses $ 195 $ 130 $ 65 $ 90 $ 195
Noninterest
income $ 503 $ 470 $ 489 $ 453 $ 490
Noninterest
expense $ 2,363 $ 2,315 $ 2,336 $ 2,253 $ 2,235
Net income $ 1,245 $ 1,064 $ 1,285 $ 1,463 $ 1,437
Per Share Data:
Net income,
basic $ 0.32 $ 0.28 $ 0.33 $ 0.38 $ 0.37
Net income
before extra-
ordinary items,
diluted $ 0.32 $ 0.28 $ 0.33 $ 0.38 $ 0.37
Net income,
diluted $ 0.32 $ 0.28 $ 0.33 $ 0.37 $ 0.37
Cash dividends
declared $ 0.10 $ 0.10 $ 0.16 $ 0.10 $ 0.10
Book value $ 9.40 $ 9.33 $ 9.09 $ 8.67 $ 8.36
Tangible book
value $ 9.40 $ 9.33 $ 9.09 $ 8.67 $ 8.36
Performance Ratios:
Return on average
assets 1.40% 1.21% 1.47% 1.70% 1.63%
Return on average
equity 13.78% 11.91% 14.74% 17.39% 17.68%
Net interest
margin, taxable
equivalent 4.69% 4.42% 4.73% 4.98% 4.98%
Average cost
of funds 2.18% 2.71% 2.91% 3.08% 2.92%
Average yield
on loans 7.55% 7.70% 8.48% 8.91% 8.87%
Efficiency ratio 53.15% 56.34% 53.31% 50.04% 48.00%
Non-interest
income to total
revenue 11.31% 11.44% 11.16% 10.06% 10.52%
Capital & Liquidity:
Total equity to
total assets
(EOP) 10.11% 10.06% 9.84% 9.69% 9.66%
Tangible equity
to tangible
assets 10.11% 10.06% 9.84% 9.69% 9.66%
Total loans to
total deposits 98.94% 97.74% 101.55% 95.69% 91.75%
Mohave State Bank
-----------------
Regulatory Capital 9.92% 9.85% 9.73% 9.71% 9.50%
Tier 1 Capital 11.57% 11.51% 11.44% 11.88% 11.80%
Risk Based
Capital 12.81% 12.74% 12.67% 13.13% 13.04%
Asset Quality:
Gross charge-
offs $ 108 $ 88 $ 55 $ -- $ 39
Net charge-offs
(NCOs) $ 72 $ 88 $ 46 $ (34) $ 33
NCO to average
loans,
annualized 0.11% 0.13% 0.07% -0.05% 0.05%
Non-accrual
loans $ 4,087 $ 4,475 $ 585 $ 252 $ --
Other real
estate
owned $ 205 $ -- $ -- $ -- $ --
Repossessed
assets $ -- $ -- $ -- $ -- $ --
Non-performing
assets (NPAs) $ 4,292 $ 4,475 $ 585 $ 252 $ --
NPAs to total
assets 1.20% 1.24% 0.16% 0.07% 0.00%
Loans more than
90 days past
due $ -- $ -- $ -- $ -- $ --
NPAs + 90 days
past due $ 4,292 $ 4,475 $ 585 $ 252 $ --
NPAs + loans 90
days past due
to total assets 1.20% 1.24% 0.16% 0.07% 0.00%
Allowance for
loan losses to
total loans 1.35% 1.36% 1.36% 1.41% 1.39%
Allowance for
loan losses
to NPAs 88.05% 81.68% 617.61% 1429.76% --
Period End Balances:
Assets $ 359,081 $ 359,886 $ 352,236 $ 346,586 $ 344,913
Total Loans
(before re-
serves) $ 279,155 $ 268,143 $ 265,298 $ 254,386 $ 250,333
Deposits $ 282,138 $ 274,349 $ 261,256 $ 265,841 $ 272,852
Stockholders'
equity $ 36,318 $ 36,202 $ 34,658 $ 33,567 $ 33,307
Common stock
market capital-
ization $ 71,109 $ 69,164 $ 94,758 $ 93,164 $ 99,223
Full-time
equivalent
employees 90 91 92 85 83
Shares out-
standing 3,843,754 3,831,819 3,836,351 3,881,844 3,891,085
Average Balances:
Assets $ 355,081 $ 351,318 $ 349,664 $ 345,045 $ 352,326
Earning assets $ 336,165 $ 329,444 $ 328,981 $ 325,474 $ 334,601
Total Loans
(before
reserves) $ 264,493 $ 264,493 $ 260,492 $ 252,455 $ 249,074
Deposits $ 270,768 $ 266,946 $ 277,858 $ 271,650 $ 278,847
Other
borrowings $ 46,640 $ 46,981 $ 41,270 $ 37,446 $ 39,860
Stockholders'
equity $ 36,139 $ 35,737 $ 34,873 $ 33,649 $ 32,516
Shares out-
standing,
basic - wtd 3,842,544 3,831,528 3,863,930 3,884,355 3,897,080
Shares out-
standing, di-
luted - wtd 3,856,640 3,838,528 3,871,383 3,891,808 3,904,533
State Bank Corp.
Balance Sheets
For the Quarter Ended Qrt/Qrt Yr/Yr
Dollars in ---------------------------- --------------
thousands 6/30/08 3/31/08 6/30/07 Change
-------------------------------------------------- --------------
Consolidated
Balance Sheets
Assets
Cash and cash
equivalents $ 7,275 $ 7,018 $ 4,625 3.7% 57.3%
Federal funds
sold -- 8,000 -100.0%
Held for maturity
securities 5,498 8,515 14,674 -35.4% -62.5%
Available for
sale securities 50,188 51,687 60,684 -2.9% -17.3%
-------- -------- --------
Total cash and
securities 62,961 75,220 79,983 -16.3% -21.3%
Loans held for
sale, before
reserves $ 1,653 $ 523 $ 530 -16.3% 211.9%
Gross loans held
for investment 277,502 267,620 249,803 3.7% 11.1%
Loan loss reserve (3,779) (3,655) (3,480) 3.4% 8.6%
-------- -------- --------
Total net loans 275,376 264,488 246,853 4.1% 11.6%
Premises and
equipment, net $ 10,239 $ 10,367 $ 7,495 -1.2% 36.6%
Deferred taxes 1,356 1,082 1,788 25.3% -24.2%
Federal Home
Loan Bank and
other stock 1,801 1,698 1,638 6.1% 10.0%
Company owned
life insurance 4,868 4,821 4,692 1.0% 3.8%
Other assets 2,480 2,210 2,464 12.2% 0.6%
-------- -------- --------
Total Assets $359,081 $359,886 $344,913 -0.2% 4.1%
======== ======== ========
Liabilities
Non interest
bearing demand $ 72,833 $ 53,670 $ 60,358 35.7% 20.7%
Money market,
NOW and savings 129,745 138,310 131,827 -6.2% -1.6%
Time deposits
less than $100K 32,819 33,330 33,809 -1.5% -2.9%
Time deposits
more than $100K 46,741 49,039 46,858 -4.7% -0.2%
-------- -------- --------
Total Deposits 282,138 274,349 272,852 2.8% 3.4%
-------- -------- --------
Securities sold
under repurchase
agreements 18,282 27,191 27,196 -32.8% -32.8%
Federal Home
Loan Bank
advances 20,850 20,490 10,455 1.8% 99.4%
-------- -------- --------
Total Debt 39,132 47,681 37,651 -17.9% 3.9%
Other Liabilities 1,493 1,654 1,103 -9.7% 35.4%
-------- -------- --------
Total Liabilities 322,763 323,684 311,606 -0.3% 3.6%
Shareholders'
Equity
Common stock $ 21,589 $ 21,589 $ 21,399 0.0% 0.9%
Accumulated
retained
earnings 14,642 13,994 12,685 4.6% 15.4%
Accumulated
other compre-
hensive loss 87 619 (777) -85.9% -111.2%
-------- -------- --------
Total share-
holders' equity $ 36,318 $ 36,202 $ 33,307 0.3% 9.0%
Total liabilities
and shareholders'
equity $359,081 $359,886 $344,913 -0.2% 4.1%
======== ======== ========
State Bank Corp.
Income Statements
For the Quarter Ended
--------------------------------------
Dollars in thousands 6/30/2008 3/31/2008 6/30/2007
----------------------------------------------------------------------
Condensed Statements of Income
Interest income
Loans, including fees $ 4,995 $ 5,093 $ 5,522
Securities 669 664 849
Other 10 11 120
----------- ----------- -----------
Total interest income 5,674 5,768 6,491
----------- ----------- -----------
Interest expense
Deposits 1,457 1,802 1,923
Borrowings 274 327 402
----------- ----------- -----------
Total interest expense 1,731 2,129 2,325
----------- ----------- -----------
Net interest income 3,943 3,639 4,166
----------- ----------- -----------
Provision for loan losses 195 130 195
----------- ----------- -----------
Net interest income after
loan loss provision 3,748 3,509 3,971
----------- ----------- -----------
Noninterest income
Service charges on deposits 167 170 136
Mortgage loan fees 17 55 103
Gain/losses on sale of loans 264 141 213
Other income 55 104 38
----------- ----------- -----------
Total noninterest income 503 470 490
----------- ----------- -----------
Noninterest expense
Salaries and employee
benefits 1,250 1,319 1,407
Net occupancy expense 120 95 66
Equipment expense 78 81 56
Data processing 391 326 307
Director fees & expenses 107 128 109
Insurance 14 14 12
Marketing & promotion 133 125 105
Professional fees 58 28 47
Office expense 70 75 57
Regulatory assessments 45 40 7
Other expenses 97 84 62
----------- ----------- -----------
Total noninterest expense 2,363 2,315 2,235
----------- ----------- -----------
Income before income taxes 1,888 1,664 2,226
----------- ----------- -----------
Income taxes 643 600 789
----------- ----------- -----------
Net Income $ 1,245 $ 1,064 $ 1,437
=========== =========== ===========
Per Share Data
Basic EPS $ 0.32 $ 0.28 $ 0.37
Diluted EPS $ 0.32 $ 0.28 $ 0.37
Average shares outstanding
Basic 3,842,544 3,831,528 3,897,080
Effect of dilutive
stock options 14,096 7,000 7,453
----------- ----------- -----------
Diluted 3,856,640 3,838,528 3,904,533
----------- ----------- -----------
State Bank Corp.
Deposit and Loan Mix
For the Quarter Ended
-------------------------------------------------
Dollars in thousands 6/30/08 3/31/07 12/31/07 9/30/07 6/30/07
---------------------------------------------------------------------
Deposit and Loan Mix
Deposit Breakout
Non interest
bearing demand $ 72,833 $ 53,670 $ 48,966 $ 56,424 $ 60,358
Interest bearing
NOW 4,292 4,133 4,112 3,608 6,160
Savings 4,195 3,738 3,802 4,041 4,444
Money market 121,258 130,439 123,916 121,411 121,223
Time deposits
less than
$100K 32,819 33,330 30,405 32,305 33,809
Time deposits
more than
$100K 46,741 49,039 50,055 48,052 46,858
--------- --------- --------- --------- ---------
Total deposits $ 282,138 $ 274,349 $ 261,256 $ 265,841 $ 272,852
Loan Breakout
Commercial and
industrial $ 33,716 $ 33,100 $ 33,912 $ 30,513 $ 30,973
Real estate -
construction 79,881 77,212 74,917 75,816 84,844
Real estate -
residential 43,076 36,891 34,958 30,530 26,415
Real estate -
commercial 121,339 119,872 120,371 116,252 106,694
Consumer 1,762 1,745 1,860 1,976 2,158
--------- --------- --------- --------- ---------
Total loans $ 279,774 $ 268,820 $ 266,018 $ 255,087 $ 251,084
Less unearned
fees and interest 619 677 720 701 751
--------- --------- --------- --------- ---------
Total loans net
of unearned
fees and
interest $ 279,155 $ 268,143 $ 265,298 $ 254,386 $ 250,333
Less allowance for
loan losses 3,779 3,655 3,613 3,603 3,480
--------- --------- --------- --------- ---------
Loans, net $ 275,376 $ 264,488 $ 261,685 $ 250,783 $ 246,853
Nonperforming Loans
Commercial and
industrial $ 8 $ -- $ -- $ -- $ --
Real estate -
construction 4,284 4,475 585 252 --
Real estate -
residential -- -- -- -- --
Real estate -
commercial -- -- -- -- --
Consumer -- -- -- -- --
--------- --------- --------- --------- ---------
Total
nonperforming
loans $ 4,292 $ 4,475 $ 585 $ 252 $ --