LAKE HAVASU CITY, Ariz., July 29, 2011 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ) ("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income of $133,000, or $0.02 per diluted share, for the quarter ended June 30, 2011, as compared to a net operating loss of $7.6 million, or $1.98 per diluted share, for the same period of 2010. For the six months ended June 30, 2011, the Company reported net income of $282,000, or $0.06 per diluted share, as compared to a net operating loss of $7.5 million, or $1.95 per diluted share, for the same period of 2010.
Second Quarter 2011 Highlights include:
-
Second straight quarter of profitability after reporting a $10.2 million net operating loss in 2010.
-
Raised $1.1 million in additional capital during the quarter, resulting in a total of $1.6 million raised since inception of the common stock offering, net of expenses. Additionally, $1.13 million of subordinated debt was converted into common stock, saving the Company $91,000 per year in debt service coverage.
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Continued strong sales of foreclosures with 6 properties sold for proceeds exceeding $580,000.
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Successful workouts negotiated for two large development loans totaling $6.25 million.
- The Bank's total risk based capital percentage climbed to 12.38%, satisfying its Consent Order requirement of 12.00%.
"During this quarter, we absorbed nearly $1 million in costs related to Other Real Estate Owned and remained profitable. We continue to focus on reducing nonperforming assets, selling OREO, and growing our core customer base," commented Brian M. Riley, President & CEO.
With improvement in the credit environment, the Company was not required to add any additional loan loss reserves during the second quarter of 2011 as compared to $7.4 million in the same period of 2010, an indication that real estate values are starting to stabilize. Net credit losses during the second quarter of 2011 were $1.8 million as compared to $2.4 million for the same period of 2010.
The Company's net interest margin continues to remain strong, with three straight quarters exceeding 4.00 percent. The net interest margin was 4.28 percent during the quarter ended June 30, 2011. The main component is the trending decline in cost of funds, which decreased 50 basis points year over year to 0.68 percent at June 30, 2011.
Nonperforming assets were $43.7 million at June 30, 2011, an increase of $2.6 million from $41.1 million at December 31, 2010. Nonperforming assets represented 14.6 percent of total assets at June 30, 2011 as compared to 13.6 percent at December 31, 2010. Of the $26.7 million in nonaccrual loans at June 30, 2011, $7.8 million in loans continue to perform as agreed and will in time be restored to accrual status. The allowance for loan and lease losses totaled $6.4 million, or 3.10 percent of total loans, at June 30, 2011. 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.
As of June 30, 2011, total assets were $300.2 million, a decrease of $2.4 million from $302.6 million at December 31, 2010. Total loans were $205.2 million at June 30, 2011 as compared to $218.6 million at December 31, 2010. Total deposits were $260.2 million at June 30, 2011 as compared to $253.2 million at December 31, 2010, as the Company grew core customer relationships.
Shareholder equity increased to $27.3 million at June 30, 2011 from $23.8 million at December 31, 2010. This was a result of the combination of net operating income and success in the Company's common stock offering. The Bank must meet certain minimum capital requirements to satisfy federal and state laws. The following table provides the Bank's capital ratio at June 30, 2011:
|
Actual Ratio |
Ratio to be well capitalized |
Consent Order Requirement |
|
| Leverage Ratio | 8.76% | 5.00% | 9.25% |
| Tier 1 Capital to Risk-Weighted Assets | 11.12% | 6.00% | N/A |
| Total Capital to Risk-Weighted Assets | 12.38% | 10.00% | 12.00% |
The Company has completed its recent stock offering. The Company will continue to use active balance management strategies to comply with its Consent Order requirements.
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.
The State Bank Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8162
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 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | |
| Performance Highlights | ||||||
| Earnings: | ||||||
| Total revenue (Net int. income + nonint. income) | $ 3,246 | $ 3,299 | $ 3,406 | $ 3,330 | $ 3,660 | |
| Net interest income | $ 2,756 | $ 2,846 | $ 2,827 | $ 2,796 | $ 3,185 | |
| Provision for loan losses | $ -- | $ 196 | $ 1,100 | $ 200 | $ 7,400 | |
| Noninterest income | $ 490 | $ 453 | $ 579 | $ 534 | $ 475 | |
| Noninterest expense | $ 3,113 | $ 2,954 | $ 3,208 | $ 2,395 | $ 5,954 | |
| Net income (loss) | $ 133 | $ 149 | $ (2,893) | $ 235 | $ (7,647) | |
| Per Share Data: | ||||||
| Net income (loss), basic | $ 0.02 | $ 0.04 | $ (0.75) | $ 0.06 | $ (1.98) | |
| Net income (loss), diluted | $ 0.02 | $ 0.04 | $ (0.75) | $ 0.06 | $ (1.98) | |
| Cash dividends declared | $ -- | $ -- | $ -- | $ -- | $ -- | |
| Book value | $ 4.80 | $ 5.80 | $ 6.17 | $ 7.00 | $ 6.92 | |
| Tangible book value | $ 4.80 | $ 5.80 | $ 6.17 | $ 7.00 | $ 6.92 | |
| Performance Ratios: | ||||||
| Return on average assets | 0.17% | 0.19% | -3.63% | 0.28% | -8.39% | |
| Return on average equity | 1.96% | 2.45% | -44.46% | 3.45% | -101.38% | |
| Net interest margin, taxable equivalent | 4.28% | 4.33% | 4.10% | 3.72% | 3.99% | |
| Average cost of funds | 0.68% | 0.72% | 0.82% | 1.03% | 1.20% | |
| Average yield on loans | 5.57% | 5.67% | 5.46% | 5.49% | 6.10% | |
| Efficiency ratio | 95.90% | 89.54% | 94.19% | 71.92% | 162.68% | |
| Non-interest income to total revenue | 15.10% | 13.73% | 17.00% | 16.04% | 12.98% | |
| Capital & Liquidity: | ||||||
| Total equity to total assets (EOP) | 9.08% | 7.86% | 8.40% | 7.61% | 9.27% | |
| Tangible equity to tangible assets | 9.08% | 7.86% | 8.40% | 7.61% | 9.27% | |
| Total loans to total deposits | 79.37% | 87.30% | 83.83% | 79.63% | 80.42% | |
| Mohave State Bank | ||||||
| Tier 1 leverage ratio | 8.76% | 8.41% | 7.80% | 8.12% | 7.52% | |
| Tier 1 risk based capital | 11.12% | 10.46% | 9.61% | 10.31% | 9.81% | |
| Total risk based capital | 12.38% | 11.74% | 10.88% | 11.58% | 11.10% | |
| Asset Quality: | ||||||
| Gross charge-offs | $ 1,848 | $ 318 | $ 2,372 | $ 4,040 | $ 2,409 | |
| Net charge-offs (NCOs) | $ 1,816 | $ 260 | $ 2,199 | $ 4,031 | $ 2,402 | |
| NCO to average loans, annualized | 3.47% | 0.48% | 3.87% | 6.83% | 3.77% | |
| Non-accrual loans | $ 26,746 | $ 21,162 | $ 23,587 | $ 23,324 | $ 14,377 | |
| Other real estate owned | $ 16,962 | $ 16,966 | $ 17,467 | $ 16,130 | $ 14,893 | |
| Repossessed assets | $ -- | $ -- | $ -- | $ 30 | $ -- | |
| Non-performing assets (NPAs) | $ 43,708 | $ 38,128 | $ 41,054 | $ 39,484 | $ 29,270 | |
| NPAs to total assets | 14.56% | 12.28% | 13.57% | 12.28% | 8.35% | |
| Loans >90 days past due | $ 435 | $ -- | $ -- | $ 36 | $ 379 | |
| NPAs + 90 days past due | $ 44,143 | $ 38,128 | $ 41,054 | $ 39,520 | $ 24,031 | |
| NPAs + loans 90 days past due to total assets | 14.70% | 12.28% | 13.57% | 12.29% | 8.45% | |
| Allowance for loan losses to total loans | 3.09% | 3.88% | 3.74% | 4.07% | 5.56% | |
| Allowance for loan losses to NPAs | 14.62% | 21.52% | 20.14% | 23.73% | 55.82% | |
| Period End Balances: | ||||||
| Assets | $ 300,192 | $ 310,417 | $ 302,637 | $ 321,438 | $ 350,723 | |
| Total Loans (before reserves) | $ 206,554 | $ 211,391 | $ 221,099 | $ 230,016 | $ 237,629 | |
| Deposits | $ 260,239 | $ 262,572 | $ 253,259 | $ 274,388 | $ 298,404 | |
| Stockholders' equity | $ 27,257 | $ 24,795 | $ 23,777 | $ 26,994 | $ 26,675 | |
| Common stock market capitalization | $ 12,720 | $ 12,830 | $ 7,170 | $ 11,526 | $ 15,342 | |
| Full-time equivalent employees | 77 | 76 | 75 | 77 | 81 | |
| Shares outstanding | 5,678,718 | 4,276,589 | 3,854,714 | 3,854,714 | 3,854,714 | |
| Average Balances: | ||||||
| Assets | $ 309,688 | $ 307,770 | $ 318,759 | $ 341,627 | $ 364,604 | |
| Earning assets | $ 264,124 | $ 269,814 | $ 283,134 | $ 308,256 | $ 326,374 | |
| Total Loans (before reserves) | $ 209,414 | $ 215,506 | $ 227,485 | $ 235,987 | $ 248,432 | |
| Deposits | $ 258,275 | $ 260,438 | $ 268,722 | $ 290,062 | $ 308,763 | |
| Other borrowings | $ 23,506 | $ 22,175 | $ 23,084 | $ 23,203 | $ 24,704 | |
| Stockholders' equity | $ 27,111 | $ 24,335 | $ 26,030 | $ 27,272 | $ 30,173 | |
| Shares outstanding, basic - wtd | 5,405,572 | 3,895,714 | 3,854,714 | 3,854,714 | 3,854,714 | |
| Shares outstanding, diluted - wtd | 5,407,139 | 3,906,856 | 3,857,001 | 3,857,634 | 3,857,634 | |
| State Bank Corp. | |||
| Balance Sheets | |||
| Dollars in thousands - Unaudited | 6/30/2011 | 12/31/2010 | |
| Consolidated Balance Sheets | |||
| Assets | |||
| Cash and cash equivalents | $ 2,124 | $ 4,102 | |
| Interest bearing deposits | 3,155 | 200 | |
| Overnight funds sold | 18,120 | 13,690 | |
| Held for maturity securities | 643 | 684 | |
| Available for sale securities | 37,346 | 32,262 | |
| Total cash and securities | 61,388 | 50,938 | |
| Loans held for sale, before reserves | 1,068 | 2,264 | |
| Gross loans held for investment | 205,226 | 218,559 | |
| Loan loss reserve | (6,391) | (8,270) | |
| Total net loans | 199,903 | 212,553 | |
| Premises and equipment, net | 10,685 | 10,842 | |
| Other real estate owned | 16,962 | 17,467 | |
| Federal Home Loan Bank and other stock | 2,617 | 2,829 | |
| Company owned life insurance | 5,415 | 5,327 | |
| Other assets | 3,222 | 2,681 | |
| Total Assets | $ 300,192 | $ 302,637 | |
| Liabilities | |||
| Non interest bearing demand | $ 46,474 | $ 42,894 | |
| Money market, NOW and savings | 127,514 | 122,331 | |
| Time deposits <$100K | 46,391 | 43,452 | |
| Time deposits >$100K | 39,860 | 44,582 | |
| Total Deposits | 260,239 | 253,259 | |
| Securities sold under repurchase agreements | 9,244 | 21,051 | |
| Federal Home Loan Bank advances | 2,000 | 2,000 | |
| Subordinated debt | 675 | 1,812 | |
| Total Debt | 11,919 | 24,863 | |
| Other Liabilities | 777 | 738 | |
| Total Liabilities | 272,935 | 278,860 | |
| Shareholders' Equity | |||
| Common stock | 24,522 | 21,655 | |
| Accumulated retained earnings | 2,115 | 1,833 | |
| Accumulated other comprehensive income | 620 | 289 | |
| Total shareholders equity | 27,257 | 23,777 | |
| Total liabilities and shareholders' equity | $ 300,192 | $ 302,637 | |
| State Bank Corp. | ||||||
| Statement of Operations | ||||||
| For the Quarter Ended | Year to Date | |||||
| Dollars in thousands - Unaudited | 6/30/2011 | 6/30/2010 | 6/30/2011 | 6/30/2010 | ||
| Statements of Operations | ||||||
| Interest income | ||||||
| Loans, including fees | $ 2,917 | $ 3,787 | $ 5,974 | $ 7,528 | ||
| Securities | 317 | 381 | 604 | 852 | ||
| Fed funds and other | 1 | 18 | 14 | 35 | ||
| Total interest income | 3,235 | 4,186 | 6,592 | 8,415 | ||
| Interest expense | ||||||
| Deposits | 423 | 921 | 860 | 2,003 | ||
| Borrowings | 56 | 80 | 131 | 248 | ||
| Total interest expense | 479 | 1,001 | 991 | 2,251 | ||
| Net interest income | 2,756 | 3,185 | 5,601 | 6,164 | ||
| Provision for loan losses | -- | 7,400 | 195 | 8,715 | ||
| Net interest income after loan loss provision | 2,756 | (4,215) | 5,406 | (2,551) | ||
| Noninterest income | ||||||
| Service charges on deposits | 123 | 168 | 239 | 339 | ||
| Mortgage loan fees | 88 | 6 | 183 | 21 | ||
| Gain on sale of loans | 145 | 215 | 254 | 357 | ||
| Other income | 134 | 86 | 268 | 546 | ||
| Total noninterest income | 490 | 475 | 944 | 1,263 | ||
| Noninterest expense | ||||||
| Salaries and employee benefits | 1,138 | 1,146 | 2,238 | 2,259 | ||
| Net occupancy expense | 72 | 85 | 167 | 175 | ||
| Equipment expense | 36 | 54 | 78 | 107 | ||
| Data processing | 244 | 275 | 478 | 549 | ||
| Director fees & expenses | 38 | 63 | 78 | 127 | ||
| Insurance | 48 | 19 | 96 | 36 | ||
| Marketing & promotion | 58 | 81 | 108 | 173 | ||
| Professional fees | 124 | 131 | 186 | 188 | ||
| Office expense | 57 | 58 | 100 | 115 | ||
| Regulatory assessments | 224 | 339 | 434 | 571 | ||
| OREO and repossessed assets | 975 | 3,544 | 1,916 | 3,786 | ||
| Other expenses | 99 | 159 | 189 | 225 | ||
| Total noninterest expense | 3,113 | 5,954 | 6,068 | 8,311 | ||
| Income (loss) before provision (benefit) for income taxes | 133 | (9,694) | 282 | (9,599) | ||
| Provision (benefit) for income taxes | -- | (2,047) | -- | (2,081) | ||
| Net Income (Loss) | $ 133 | $ (7,647) | $ 282 | $ (7,518) | ||
| Per Share Data | ||||||
| Basic EPS | $ 0.02 | $ (1.98) | $ 0.06 | $ (1.95) | ||
| Diluted EPS | $ 0.02 | $ (1.98) | $ 0.06 | $ (1.95) | ||
| Average shares outstanding | ||||||
| Basic | 5,405,572 | 3,854,714 | 4,654,814 | 3,848,703 | ||
| Effect of dilutive shares | 1,567 | 2,920 | 6,328 | 13,713 | ||
| Diluted | 5,407,139 | 3,857,634 | 4,661,142 | 3,862,416 | ||