State Bank Financial Corporation Reports Third Quarter 2017 Financial Results

Atlanta, Georgia, UNITED STATES


  • Third quarter 2017 net income of $14.4 million, or $.37 per diluted share
  • Return on average assets of 1.37% in the third quarter of 2017
  • Completed AloStar Bank of Commerce merger transaction on September 30, 2017, less than four months after announcement
  • Proactive expense management led to third quarter efficiency ratio of 58.45%
  • Average noninterest-bearing deposit growth of $32 million, or 3.3%, quarter over quarter

ATLANTA, Oct. 26, 2017 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the third quarter ended September 30, 2017.  Net income for the third quarter of 2017 was $14.4 million, compared to $15.2 million in the second quarter of 2017 and $12.4 million in the third quarter of 2016.  The linked-quarter decline was primarily attributable to a reduction in loan recovery income of $2.3 million.  Fully diluted earnings per share were $.37 in the third quarter of 2017, compared to $.39 in the second quarter of 2017 and $.34 in the third quarter of 2016.

Joe Evans, Chairman of State Bank Financial, commented, “I am extremely pleased with our team’s ability to promptly close the meaningfully accretive AloStar transaction in the third quarter. I look forward to closing out 2017 with a full quarter of AloStar's earnings on top of what was already shaping up to be an outstanding year for State Bank. AloStar brings a talented team with deep industry knowledge and a robust pipeline that will help us jumpstart 2018.”

Operating Highlights

Interest income on loans improved to $35.4 million in the third quarter of 2017, a $528,000 increase from the second quarter of 2017 and an $8.8 million increase from the third quarter of 2016.  Net interest income of $44.3 million in the third quarter of 2017 decreased from $46.5 million in the second quarter of 2017 but increased from $38.1 million in the third quarter of 2016.  Accretion income on loans was $6.5 million in the third quarter of 2017, down from $9.2 million in the second quarter of 2017 and $9.3 million in the third quarter of 2016.  As of September 30, 2017, approximately $67 million of accretable discount remains to be recognized as loan accretion income.

Noninterest income was $9.7 million in the third quarter of 2017, compared to $10.5 million in the second quarter of 2017 and $9.8 million in the third quarter of 2016.  Revenues in mortgage and SBA declined $303,000 and $519,000, respectively, in the third quarter of 2017, compared to the second quarter of 2017 while payroll and insurance income increased $69,000.

Total noninterest expense for the third quarter of 2017 was $31.6 million, compared to $32.0 million in the second quarter of 2017 and $28.5 million in the third quarter of 2016.  The $426,000 linked-quarter decrease was primarily due to lower commission, incentive, and employee benefits costs, which were down $421,000 from the previous quarter due to lower production levels in noninterest income lines.

Financial Condition

Comparison of period-end balance sheet metrics for the quarter ended September 30, 2017 to prior periods is materially affected by the acquisition of AloStar Bank of Commerce, which was completed on September 30, 2017.  Average balance sheet metrics for the quarter were not impacted by the acquisition.

Total assets at September 30, 2017, were $5.1 billion, up from $4.2 billion at June 30, 2017.  Total loans were $3.6 billion at September 30, 2017, up $691.8 million from the second quarter of 2017 due to $718.6 million of loans acquired from AloStar Bank of Commerce.  Period-end organic loans increased to $2.3 billion at September 30, 2017, an increase of $29.2 million from the second quarter of 2017.  Purchased non-credit impaired and purchased credit impaired loans, excluding the AloStar acquisition, decreased to $549.6 million at the end of the third quarter of 2017, a $55.9 million linked-quarter decline.

Tom Wiley, Vice Chairman and CEO, commented “Reporting $14.4 million in net income for the quarter reflects the increasingly strong performance of the core bank.  The fundamental trends remain strong, our team is intently focused on delivering an exceptional experience for our clients, and we are very excited about the complementary opportunity AloStar represents for the future of our combined franchise.”

Credit quality metrics remain solid at September 30, 2017.  Past due organic and purchased non-credit impaired loans were .12% and .48% of their respective portfolios. The provision for loan losses on organic and purchased non-credit impaired loans was $1.3 million in the third quarter of 2017 and was primarily attributable to net charge-offs, organic loan growth, and continued seasoning of the purchased non-credit impaired portfolio.  The organic allowance as a percent of organic loans was .99% at the end of the third quarter of 2017.

Total deposits at September 30, 2017, were $4.2 billion, up $788.4 million from $3.5 billion at June 30, 2017, including $705.6 million of deposits acquired from AloStar Bank of Commerce. Period-end transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $198.3 million from the second quarter of 2017 inclusive of the acquisition.  Noninterest-bearing demand deposits represented 27.8% of total deposits as of September 30, 2017.  Average noninterest-bearing demand deposits were $1.0 billion, a $32.0 million increase from the second quarter of 2017 and a $181.0 million increase from the third quarter of 2016.

Tangible book value per share was $14.01 at the end of the third quarter of 2017.  State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 13.37% and a Tier I risk-based capital ratio of 12.21%.

Detailed Results

Supplemental tables displaying financial results for the third quarter of 2017, the previous four quarters and year-to-date 2017 are included with this press release.

Non-GAAP Financial Measures

This press release contains financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  For more information on these non-GAAP financial measures, please refer to 3Q17 Financial Supplement: Table 8, Reconciliation of Non-GAAP Measures.

Conference Call

Chairman Joe Evans, Chief Executive Officer Tom Wiley, Chief Financial Officer and Chief Operating Officer Sheila Ray, and Chief Credit Officer David Black will discuss financial and business results for the quarter on a conference call today at 11:00 a.m. ET.

Dial in number:  1.800.630.4153

Please allow time to register your name and affiliation/company prior to the start of the call.  A replay of the conference call will be available shortly after the call is completed in the Investors section on the company’s website at www.statebt.com.  A slide presentation for today’s call is also available in the Investors section on the company’s website.

About State Bank Financial Corporation

State Bank Financial Corporation (NASDAQ:STBZ), with approximately $5.1 billion in assets as of September 30, 2017, is an Atlanta-based bank holding company for State Bank and Trust Company.  State Bank operates a full service banking business and offers a broad range of commercial and retail banking products to our customers throughout seven of Georgia’s eight largest MSAs.

To learn more about State Bank, visit www.statebt.com

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release and other information that we make publicly available from time to time are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “intend,” “anticipate,” “plan,” “seek,” “believe,” “expect,” “strategy,” “future,” “likely,” “project,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements regarding the amount of accretable discount that remains, our expectation that the AloStar Bank of Commerce transaction will meaningfully enhance our earnings through significant earnings accretion, and statements regarding the impact of AloStar's pipeline on our future performance. Such forward-looking statements are subject to risks, uncertainties, and other factors, including a downturn in the economy, particularly in our markets, volatile credit and financial markets both domestic and foreign, potential deterioration in real estate values, regulatory changes and excessive loan losses, the conversion of AloStar's operating systems and procedures may take longer than anticipated or may be more costly than anticipated or have unanticipated adverse results relating to the Company's or AloStar's existing businesses, the anticipated benefits of the AloStar transaction, including anticipated cost savings and strategic gains, may be significantly harder or take longer to achieve than expected or may not be achieved in their entirety as a result of unexpected factors or events, as well as additional risks and uncertainties contained in the “Risk Factors” and forward-looking statements disclosure contained in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, any or all of which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.


State Bank Financial Corporation
3Q17 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
            3Q17 change vs
(Dollars in thousands, except per share  amounts) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
               
Income Statement Highlights              
Interest income on loans $35,400  $34,872  $34,060  $26,696  $26,580  $528  $8,820 
Accretion income on loans 6,520  9,228  7,677  10,271  9,335  (2,708) (2,815)
Interest income on invested funds 5,782  5,747  5,460  4,810  4,714  35  1,068 
Total interest income 47,702  49,847  47,197  41,777  40,629  (2,145) 7,073 
Interest expense 3,370  3,369  3,239  2,631  2,504  1  866 
Net interest income 44,332  46,478  43,958  39,146  38,125  (2,146) 6,207 
Provision for loan and lease losses
(organic & PNCI loans)
 1,300  1,470  1,361  300  7  (170) 1,293 
Provision for loan and lease losses
   (purchased credit impaired loans)
 (885) 375  (359) (23) 81  (1,260) (966)
Provision for loan and lease losses 415  1,845  1,002  277  88  (1,430) 327 
Total noninterest income 9,682  10,476  9,459  9,911  9,769  (794) (87)
Total noninterest expense 31,571  31,997  34,565  32,875  28,480  (426) 3,091 
Income before income taxes 22,028  23,112  17,850  15,905  19,326  (1,084) 2,702 
Income tax expense 7,592  7,909  6,292  5,578  6,885  (317) 707 
Net income $14,436  $15,203  $11,558  $10,327  $12,441  $(767) $1,995 
               
Common Share Data              
Basic earnings per share $.37  $.39  $.30  $.28  $.34  $(.02) $.03 
Diluted earnings per share .37  .39  .30  .28  .34  (.02) .03 
Cash dividends declared per share .14  .14  .14  .14  .14     
Book value per share 16.48  16.23  15.96  15.80  15.21  .25  1.27 
Tangible book value per share (1) 14.01  13.94  13.66  13.48  13.99  .07  .02 
Market price per share (quarter end) 28.65  27.12  26.12  26.86  22.82  1.53  5.83 
               
Common Shares Outstanding              
Common stock 38,991,022  38,967,972  38,870,424  38,845,573  36,894,553  23,050  2,096,469 
Weighted average shares outstanding:              
Basic 37,918,753  37,896,125  37,867,718  35,904,009  35,863,183  22,628  2,055,570 
Diluted 37,963,141  37,942,483  37,954,585  36,009,098  35,965,948  20,658  1,997,193 
               
Average Balance Sheet Highlights              
Loans $2,893,187  $2,905,415  $2,846,571  $2,431,512  $2,406,629  $(12,228) $486,558 
Assets 4,178,731  4,200,843  4,181,961  3,636,544  3,564,860  (22,112) 613,871 
Deposits 3,437,329  3,413,831  3,423,506  2,975,510  2,866,822  23,498  570,507 
Equity 638,620  627,294  617,009  559,561  557,365  11,326  81,255 
Tangible equity (1) 550,002  538,153  527,603  514,982  512,265  11,849  37,737 
               


State Bank Financial Corporation
3Q17 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
            3Q17 change vs
(Dollars in thousands, except per share
    amounts)
 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
               
Key Metrics (2)              
Return on average assets 1.37% 1.45% 1.12% 1.13% 1.39% (.08)% (.02)%
Return on average equity 8.97  9.72  7.60  7.34  8.88  (.75) .09 
Yield on earning assets 4.85  5.11  4.93  4.87  4.84  (.26) .01 
Cost of funds .38  .38  .37  .35  .34    .04 
Rate on interest-bearing liabilities .54  .53  .52  .49  .47  .01  .07 
Net interest margin 4.51  4.76  4.59  4.56  4.54  (.25) (.03)
Leverage ratio (3) 13.37  13.23  13.04  14.90  14.64  .14  (1.27)
Tier I risk-based capital ratio (3) 12.21  15.01  14.74  14.78  16.68  (2.80) (4.47)
Total risk-based capital ratio (3) 12.81  15.79  15.49  15.52  17.56  (2.98) (4.75)
Efficiency ratio (4) 58.45  56.18  64.71  67.01  59.46  2.27  (1.01)
Average loans to average deposits 84.17  85.11  83.15  81.72  83.95  (.94) .22 
Noninterest-bearing deposits to total
   deposits
 27.82  29.24  27.71  28.69  30.09  (1.42) (2.27)

(1)   Denotes a non-GAAP financial measure. See Reconciliation of Non-GAAP Measures (Table 8) for further information.
(2)   Income statement ratios and yield/rate information are annualized for the applicable period.
(3)   Current period capital ratios are estimated as of the date of this earnings release.
(4)   Noninterest expense divided by net interest income plus noninterest income.

State Bank Financial Corporation
3Q17 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
            3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
               
Assets              
Cash and amounts due from depository institutions $14,235  $11,284  $12,101  $13,219  $10,648  $2,951  $3,587 
Interest-bearing deposits in other financial institutions 251,115  126,390  62,222  132,851  103,122  124,725  147,993 
Federal funds sold 16,889      3,523    16,889  16,889 
Cash and cash equivalents 282,239  137,674  74,323  149,593  113,770  144,565  168,469 
Investment securities available-for-sale 920,763  847,795  896,297  847,178  822,655  72,968  98,108 
Investment securities held-to-maturity 57,867  63,104  67,053  67,063  67,071  (5,237) (9,204)
Loans 3,572,790  2,881,000  2,854,780  2,814,572  2,346,346  691,790  1,226,444 
Allowance for loan and lease losses (26,842) (27,988) (26,976) (26,598) (27,177) 1,146  335 
Loans, net 3,545,948  2,853,012  2,827,804  2,787,974  2,319,169  692,936  1,226,779 
Loans held-for-sale 47,743  48,895  51,380  52,169  63,852  (1,152) (16,109)
Other real estate owned 1,271  2,407  3,759  10,897  10,609  (1,136) (9,338)
Premises and equipment, net 52,120  51,170  51,535  52,056  42,009  950  10,111 
Goodwill 84,564  77,476  77,084  77,084  36,357  7,088  48,207 
Other intangibles, net 11,755  11,599  12,054  12,749  8,515  156  3,240 
SBA servicing rights 3,950  3,828  3,547  3,477  3,275  122  675 
Bank-owned life insurance 66,846  66,320  65,855  65,371  60,282  526  6,564 
Other assets 73,417  70,697  71,990  99,654  69,211  2,720  4,206 
Total assets $5,148,483  $4,233,977  $4,202,681  $4,225,265  $3,616,775  $914,506  $1,531,708 
Liabilities and Shareholders’
   Equity
              
Noninterest-bearing deposits $1,179,698  $1,009,509  $944,838  $984,419  $890,588  $170,189  $289,110 
Interest-bearing deposits 3,061,387  2,443,183  2,464,937  2,446,746  2,068,704  618,204  992,683 
Total deposits 4,241,085  3,452,692  3,409,775  3,431,165  2,959,292  788,393  1,281,793 
Federal funds purchased and
   securities sold under
   agreements to repurchase
 25,499  25,256  25,056  27,673  20,124  243  5,375 
FHLB borrowings   80,000  100,000  47,014  20,000  (80,000) (20,000)
Notes payable 398  398  398  398  398     
Other liabilities 238,911  43,294  47,169  105,382  55,827  195,617  183,084 
Total liabilities 4,505,893  3,601,640  3,582,398  3,611,632  3,055,641  904,253  1,450,252 
Total shareholders’ equity 642,590  632,337  620,283  613,633  561,134  10,253  81,456 
Total liabilities and
    shareholders’ equity
 $5,148,483  $4,233,977  $4,202,681  $4,225,265  $3,616,775  $914,506  $1,531,708 
               
Capital Ratios (1)              
Average equity to average assets 15.28% 14.93% 14.75% 15.39% 15.63% .35% (.35)%
Leverage ratio 13.37  13.23  13.04  14.90  14.64  .14  (1.27)
CET1 risk-based capital ratio 12.21  15.01  14.74  14.78  16.68  (2.80) (4.47)
Tier I risk-based capital ratio 12.21  15.01  14.74  14.78  16.68  (2.80) (4.47)
Total risk-based capital ratio 12.81  15.79  15.49  15.52  17.56  (2.98) (4.75)

(1)  Current period capital ratios are estimated as of the date of this earning release.

State Bank Financial Corporation
3Q17 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
            3Q17 change vs
(Dollars in thousands, except per share  amounts) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
               
Net Interest Income:              
Interest income on loans $35,400  $34,872  $34,060  $26,696  $26,580  $528  $8,820 
Accretion income on loans 6,520  9,228  7,677  10,271  9,335  (2,708) (2,815)
Interest income on invested funds 5,782  5,747  5,460  4,810  4,714  35  1,068 
Interest expense 3,370  3,369  3,239  2,631  2,504  1  866 
Net interest income 44,332  46,478  43,958  39,146  38,125  (2,146) 6,207 
Provision for loan and lease losses
(organic & PNCI loans)
 1,300  1,470  1,361  300  7  (170) 1,293 
Provision for loan and lease losses
   (purchased credit impaired loans)
 (885) 375  (359) (23) 81  (1,260) (966)
Provision for loan and lease losses 415  1,845  1,002  277  88  (1,430) 327 
Net interest income after provision
   for loan and lease losses
 43,917  44,633  42,956  38,869  38,037  (716) 5,880 
Noninterest Income:              
Service charges on deposits 1,575  1,471  1,467  1,319  1,383  104  192 
Mortgage banking income 2,793  3,096  2,894  2,511  3,216  (303) (423)
Payroll and insurance income 1,487  1,418  1,495  1,528  1,297  69  190 
SBA income 1,464  1,983  1,178  1,718  1,553  (519) (89)
ATM income 826  864  832  735  759  (38) 67 
Bank-owned life insurance income 526  465  484  467  533  61  (7)
Gain on sale of investment securities 3  13  12  42  38  (10) (35)
Other 1,008  1,166  1,097  1,591  990  (158) 18 
Total noninterest income 9,682  10,476  9,459  9,911  9,769  (794) (87)
Noninterest Expense:              
Salaries and employee benefits 21,457  21,912  22,057  19,554  19,799  (455) 1,658 
Occupancy and equipment 3,187  3,329  3,280  3,069  2,984  (142) 203 
Data processing 2,587  2,382  2,639  2,131  2,097  205  490 
Legal and professional fees 700  898  1,805  1,702  1,064  (198) (364)
Merger-related expenses 135  372  2,235  3,507  135  (237)  
Marketing 342  403  664  430  665  (61) (323)
Federal deposit insurance premiums
   and other regulatory fees
 407  398  397  188  441  9  (34)
Loan collection costs and OREO
   activity
 181  (213) (1,042) (127) (841) 394  1,022 
Amortization of intangibles 701  697  696  516  513  4  188 
Other 1,874  1,819  1,834  1,905  1,623  55  251 
Total noninterest expense 31,571  31,997  34,565  32,875  28,480  (426) 3,091 
Income Before Income Taxes 22,028  23,112  17,850  15,905  19,326  (1,084) 2,702 
Income tax expense 7,592  7,909  6,292  5,578  6,885  (317) 707 
Net Income $14,436  $15,203  $11,558  $10,327  $12,441  $(767) $1,995 
               
Net income allocated to participating
securities
 $389  $413  $295  $282  $348  $(24) $41 
Net income allocated to common
shareholders
 14,047  14,790  11,263  10,045  12,093  (743) 1,954 
Earnings Per Share              
Basic $.37  $.39  $.30  $.28  $.34  $(.02) $.03 
Diluted .37  .39  .30  .28  .34  (.02) .03 
Weighted Average Shares Outstanding              
Basic 37,918,753  37,896,125  37,867,718  35,904,009  35,863,183  22,628  2,055,570 
Diluted 37,963,141  37,942,483  37,954,585  36,009,098  35,965,948  20,658  1,997,193 



State Bank Financial Corporation
3Q17 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)
  Nine Months Ended September 30 Change
(Dollars in thousands, except per share amounts) 2017 2016 
       
Net Interest Income:      
Interest income on loans $104,332  $76,328  $28,004 
Accretion income on loans 23,425  33,039  (9,614)
Interest income on invested funds 16,989  14,113  2,876 
Interest expense 9,978  6,988  2,990 
Net interest income 134,768  116,492  18,276 
Provision for loan and lease losses (organic & PNCI loans) 4,131  3,296  835 
Provision for loan and lease losses (purchased credit impaired loans)    (869) (3,336) 2,467 
Provision for loan and lease losses 3,262  (40) 3,302 
Net interest income after provision for loan and lease losses 131,506  116,532  14,974 
Noninterest Income:      
Service charges on deposits 4,513  4,121  392 
Mortgage banking income 8,783  9,808  (1,025)
Payroll and insurance income 4,400  4,097  303 
SBA income 4,625  4,740  (115)
ATM income 2,522  2,273  249 
Bank-owned life insurance income 1,475  1,463  12 
Gain on sale of investment securities 28  447  (419)
Other 3,271  2,441  830 
Total noninterest income 29,617  29,390  227 
Noninterest Expense:      
Salaries and employee benefits 65,426  59,221  6,205 
Occupancy and equipment 9,796  9,100  696 
Data processing 7,608  6,383  1,225 
Legal and professional fees 3,403  2,993  410 
Merger-related expenses 2,742  454  2,288 
Marketing 1,409  1,786  (377)
Federal deposit insurance premiums and other regulatory fees 1,202  1,556  (354)
Loan collection costs and OREO activity (1,074) (452) (622)
Amortization of intangibles 2,094  1,586  508 
Other 5,527  5,425  102 
Total noninterest expense 98,133  88,052  10,081 
Income Before Income Taxes 62,990  57,870  5,120 
Income tax expense 21,793  20,606  1,187 
Net Income $41,197  $37,264  $3,933 
       
Net income allocated to participating securities $1,095  $1,021  $74 
Net income allocated to common shareholders 40,102  36,243  3,859 
       
Earnings Per Share      
Basic $1.06  $1.01  $.05 
Diluted 1.06  1.01  .05 
Weighted Average Shares Outstanding      
Basic 37,894,385  35,940,402  1,953,983 
Diluted 37,943,971  36,040,655  1,903,316 
       


State Bank Financial Corporation
3Q17 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
            3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
               
Composition of Loans              
Organic loans (1):              
Construction, land & land development $460,368  $413,557  $418,186  $500,018  $486,299  $46,811  $(25,931)
Other commercial real estate 915,727  960,762  885,570  754,790  744,270  (45,035) 171,457 
Total commercial real estate 1,376,095  1,374,319  1,303,756  1,254,808  1,230,569  1,776  145,526 
Residential real estate 175,258  167,755  161,460  144,295  139,926  7,503  35,332 
Owner-occupied real estate 261,784  244,637  251,703  256,317  239,726  17,147  22,058 
Commercial, financial & agricultural 363,551  355,629  336,257  327,381  306,141  7,922  57,410 
Leases 66,765  73,103  62,603  71,724  74,722  (6,338) (7,957)
Consumer 61,200  60,028  56,776  36,039  39,373  1,172  21,827 
Total organic loans 2,304,653  2,275,471  2,172,555  2,090,564  2,030,457  29,182  274,196 
Purchased non-credit impaired loans (2):               
Construction, land & land development 30,670  31,083  43,787  51,208  10,035  (413) 20,635 
Other commercial real estate 234,486  171,914  188,737  209,531  58,261  62,572  176,225 
Total commercial real estate 265,156  202,997  232,524  260,739  68,296  62,159  196,860 
Residential real estate 112,244  117,449  137,699  144,596  56,468  (5,205) 55,776 
Owner-occupied real estate 125,438  114,438  119,871  115,566  52,016  11,000  73,422 
Commercial, financial & agricultural 558,992  31,654  33,690  36,206  10,447  527,338  548,545 
Consumer 2,647  3,393  4,281  6,255  1,826  (746) 821 
Total purchased non-credit impaired
   loans
 1,064,477  469,931  528,065  563,362  189,053  594,546  875,424 
Purchased credit impaired loans (3):              
Construction, land & land development 16,918  16,857  17,211  16,537  11,564  61  5,354 
Other commercial real estate 102,934  46,078  60,664  60,742  38,238  56,856  64,696 
Total commercial real estate 119,852  62,935  77,875  77,279  49,802  56,917  70,050 
Residential real estate 42,190  45,513  49,728  54,507  53,953  (3,323) (11,763)
Owner-occupied real estate 26,210  23,262  22,099  23,980  22,389  2,948  3,821 
Commercial, financial & agricultural 15,139  3,617  4,153  4,533  608  11,522  14,531 
Consumer 269  271  305  347  84  (2) 185 
Total purchased credit impaired
    loans
 203,660  135,598  154,160  160,646  126,836  68,062  76,824 
Total loans $3,572,790  $2,881,000  $2,854,780  $2,814,572  $2,346,346  $691,790  $1,226,444 
Composition of Deposits              
Noninterest-bearing demand deposits $1,179,698  $1,009,509  $944,838  $984,419  $890,588  $170,189  $289,110 
Interest-bearing transaction accounts 619,156  591,038  599,858  664,350  547,078  28,118  72,078 
Savings and money market deposits 1,680,922  1,373,686  1,393,711  1,292,867  1,101,458  307,236  579,464 
Time deposits 731,416  419,020  454,889  466,849  390,429  312,396  340,987 
Brokered and wholesale time deposits 29,893  59,439  16,479  22,680  29,739  (29,546) 154 
Total deposits $4,241,085  $3,452,692  $3,409,775  $3,431,165  $2,959,292  $788,393  $1,281,793 

(1) Loans originated by State Bank and Trust Company.
(2) Consists of loans purchased in our acquisitions of Bank of Atlanta, First Bank of Georgia, The National Bank of Georgia, S Bank, and AloStar.
(3) Acquired loans, which at acquisition, management determined it was probable that we would be unable to collect all contractual principal and interest payments due, including all loans acquired from the FDIC.


State Bank Financial Corporation
3Q17 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
            3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
               
Allowance for loan and lease losses on
   organic loans
              
Beginning Balance $22,560  $21,885  $21,086  $21,736  $22,008  $675  $552 
Charge-offs (912) (536) (540) (553) (311) (376) (601)
Recoveries 106  113  77  34  39  (7) 67 
Net (charge-offs) recoveries (806) (423) (463) (519) (272) (383) (534)
Provision for loan and lease losses 955  1,098  1,262  (131)   (143) 955 
Ending Balance $22,709  $22,560  $21,885  $21,086  $21,736  $149  $973 
               
Allowance for loan and lease losses on
   purchased non-credit impaired loans
              
Beginning Balance $667  $491  $439  $150  $158  $176  $509 
Charge-offs (152) (197) (48) (143) (16) 45  (136)
Recoveries 40  1  1  1  1  39  39 
Net (charge-offs) recoveries (112) (196) (47) (142) (15) 84  (97)
Provision for loan and lease losses 345  372  99  431  7  (27) 338 
Ending Balance $900  $667  $491  $439  $150  $233  $750 
               
Allowance for loan and lease losses on   
   purchased credit impaired loans
              
Beginning Balance $4,761  $4,600  $5,073  $5,291  $5,433  $161  $(672)
Charge-offs (643) (214) (114) (195) (223) (429) (420)
Recoveries              
Net (charge-offs) recoveries (643) (214) (114) (195) (223) (429) (420)
Provision for loan and lease losses (885) 375  (359) (23) 81  (1,260) (966)
Ending Balance $3,233  $4,761  $4,600  $5,073  $5,291  $(1,528) $(2,058)
               
Nonperforming organic assets              
Nonaccrual loans $5,483  $1,422  $6,114  $6,234  $6,423  $4,061  $(940)
Total nonperforming organic loans 5,483  1,422  6,114  6,234  6,423  4,061  (940)
Other real estate owned   23  232  282  83  (23) (83)
Total nonperforming organic assets $5,483  $1,445  $6,346  $6,516  $6,506  $4,038  $(1,023)
               
Nonperforming purchased non-credit
   impaired assets
              
Nonaccrual loans $5,614  $5,141  $4,098  $3,381  $1,672  $473  $3,942 
Total nonperforming PNCI loans 5,614  5,141  4,098  3,381  1,672  473  3,942 
Other real estate owned         21    (21)
Total nonperforming PNCI assets $5,614  $5,141  $4,098  $3,381  $1,693  $473  $3,921 
               
Ratios for organic assets              
Annualized QTD charge-offs
  (recoveries) on organic loans to
  average organic loans
 .14% .08% .09% .10% .05% .06% .09%
Nonperforming organic loans to organic
  loans
 .24  .06  .28  .30  .32  .18  (.08)
Nonperforming organic assets to organic
  loans + OREO
 .24  .06  .29  .31  .32  .18  (.08)
Past due organic loans to organic loans .12  .09  .08  .06  .09  .03  .03 
Allowance for loan and lease losses on
  organic loans to organic loans
 .99  .99  1.01  1.01  1.07    (.08)
               
State Bank Financial Corporation
3Q17 Financial Supplement: Table 6 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
            3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
               
Ratios for purchased non-credit
    impaired loans
              
Annualized QTD charge-offs
  (recoveries) on PNCI loans to average
  PNCI loans
 .10% .16% .03% .31% .03% (.06) % .07%
Nonperforming PNCI loans to PNCI
  loans
 .53  1.09  .78  .60  .88  (.56) (.35)
Nonperforming PNCI assets to PNCI
  loans + OREO
 .53  1.09  .78  .60  .90  (.56) (.37)
Past due PNCI loans to PNCI loans .48  1.05  .90  .68  .41  (.57) .07 
Allowance for loan and lease losses on
  PNCI loans to PNCI loans
 .08  .14  .09  .08  .08  (.06)  
               
Ratios for purchased credit impaired
     loans (1)
              
Annualized QTD charge-offs
  (recoveries) on PCI loans to average
  PCI loans
 1.95% .60% .30% .63% .68% 1.35% 1.27%
Past due PCI loans to PCI loans 8.12  10.26  10.68  8.92  11.00  (2.14) (2.88)
Allowance for loan and lease losses on
  PCI loans to PCI loans
 1.59  3.51  2.98  3.16  4.17  (1.92) (2.58)

(1) For each period presented, a portion of our purchased credit impaired loans were contractually past due; however, such delinquencies were included in our performance expectations in determining the fair values of purchased credit impaired loans at each acquisition and at subsequent valuation dates. All purchased credit impaired loan cash flows and the timing of such cash flows continue to be estimable and probable of collection and thus accretion income continues to be recognized on these assets. As such, we do not consider purchased credit impaired loans to be nonperforming assets.


State Bank Financial Corporation
3Q17 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
            3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
Average Balances              
Interest-bearing deposits in other
   financial institutions and federal funds
   sold
 $108,546  $73,862  $85,720  $82,797  $63,315  $34,684  $45,231 
Investment securities 913,898  947,300  961,913  911,025  881,642  (33,402) 32,256 
Loans, excluding purchased credit
   impaired (1)
 2,762,479  2,762,996  2,692,517  2,307,794  2,275,859  (517) 486,620 
Purchased credit impaired loans 130,708  142,419  154,054  123,718  130,770  (11,711) (62)
Total earning assets 3,915,631  3,926,577  3,894,204  3,425,334  3,351,586  (10,946) 564,045 
Total nonearning assets 263,100  274,266  287,757  211,210  213,274  (11,166) 49,826 
Total assets 4,178,731  4,200,843  4,181,961  3,636,544  3,564,860  (22,112) 613,871 
Interest-bearing transaction accounts 580,090  585,343  602,378  575,977  515,974  (5,253) 64,116 
Savings & money market deposits 1,383,326  1,380,586  1,388,876  1,118,548  1,105,635  2,740  277,691 
Time deposits 420,192  437,475  456,811  385,146  401,447  (17,283) 18,745 
Brokered and wholesale time deposits 49,675  38,353  19,926  22,885  20,723  11,322  28,952 
Other borrowings 57,988  119,652  81,344  52,555  94,455  (61,664) (36,467)
Total interest-bearing liabilities 2,491,271  2,561,409  2,549,335  2,155,111  2,138,234  (70,138) 353,037 
Noninterest-bearing deposits 1,004,046  972,074  955,515  872,954  823,043  31,972  181,003 
Other liabilities 44,794  40,066  60,102  48,918  46,218  4,728  (1,424)
Shareholders’ equity 638,620  627,294  617,009  559,561  557,365  11,326  81,255 
Total liabilities and shareholders'
   equity
 4,178,731  4,200,843  4,181,961  3,636,544  3,564,860  (22,112) 613,871 
               
Interest Margins (2)              
Interest-bearing deposits in other
   financial institutions and federal funds
   sold
 .80% .50% .44% .31% .28% .30% .52%
Investment securities, tax-equivalent
   basis
 2.42  2.39  2.26  2.07  2.11  .03  .31 
Loans, excluding purchased credit
   impaired, tax-equivalent basis (3)
 5.11  5.08  5.15  4.63  4.67  .03  .44 
Purchased credit impaired loans 19.79  25.99  20.21  33.03  28.40  (6.20) (8.61)
Total earning assets 4.85% 5.11% 4.93% 4.87% 4.84% (.26)% .01%
Interest-bearing transaction accounts .13  .12  .12  .12  .12  .01  .01 
Savings & money market deposits .63  .61  .60  .59  .54  .02  .09 
Time deposits .72  .69  .72  .72  .68  .03  .04 
Brokered and wholesale time deposits 1.05  1.05  1.06  .85  .92    .13 
Other borrowings .76  .82  .65  .45  .40  (.06) .36 
Total interest-bearing liabilities .54% .53% .52% .49% .47% .01% .07%
Net interest spread 4.31% 4.58% 4.41% 4.38% 4.37% (.27)% (.06)%
Net interest margin 4.51% 4.76% 4.59% 4.56% 4.54% (.25)% (.03)%
Net interest margin contribution
   from accretion income on loans   
 .66% .94% .80% 1.19% 1.11% (.28)% (.45)%

(1) Includes average nonaccrual loans of $8.0 million for 3Q17, $9.3 million for 2Q17, $9.9 million for 1Q17, $8.4 million for 4Q16, and $8.6 million for 3Q16.
(2) Interest income or expense annualized for the applicable period.
(3) Reflects taxable equivalent adjustments using the federal statutory tax rate of 35% in adjusting tax-exempt loan interest income to a fully taxable basis. The taxable equivalent adjustments included above amount to $177,000 for 3Q17, $131,000 for 2Q17, $140,000 for 1Q17, $142,000 for 4Q16, and $142,000 for 3Q16.


State Bank Financial Corporation
3Q17 Financial Supplement: Table 8
Reconciliation of Non-GAAP Measures (1)
Quarterly (Unaudited)
 
(dollars in thousands, except per share amounts; taxable   
    equivalent
)
3Q17 2Q17 1Q17 4Q16 3Q16
          
Book value per common share reconciliation         
Book value per common share (GAAP)$16.48  $16.23  $15.96  $15.80  $15.21 
Effect of goodwill and other intangibles(2.47) (2.29) (2.30) (2.32) (1.22)
Tangible book value per common share$14.01  $13.94  $13.66  $13.48  $13.99 
          
Average tangible equity reconciliation         
Average equity (GAAP)$638,620  $627,294  $617,009  $559,561  $557,365 
Effect of average goodwill and other intangibles(88,618) (89,141) (89,406) (44,579) (45,100)
Average tangible equity$550,002  $538,153  $527,603  $514,982  $512,265 
          

(1) Certain financial measures included in this press release, tangible book value per common share and average tangible equity, are financial measures that are not recognized by generally accepted accounting principles in the United States, or GAAP. These non-GAAP financial measures exclude the effect of the period end or average balance of intangible assets. Management believes that these non-GAAP financial measures provides additional useful information to investors, particularly since these measure are widely used by industry analysts for companies with prior merger and acquisition activities, such as us.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure is presented in the table above. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. These non-GAAP financial measures should not be considered as a substitute for GAAP financial measures, and we strongly encourage investors to review the GAAP financial measures included in this press release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this press release with other companies’ non-GAAP financial measures having the same or similar names.

Investor Relations:  Sheila Ray 404.239.8684 / sheila.ray@statebt.com