LAKE HAVASU CITY, Ariz., Feb. 01, 2019 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCPink:SBAZ) (“Company”), the holding company for State Bank of Arizona (“Bank”), today reported that net income increased by 48.2% to $2.28 million, or $0.28 per diluted share, for the fourth quarter ended December 31, 2018, as compared to $1.54 million, or $0.19 per diluted share, for the fourth quarter of 2017.  In the preceding quarter, the Company reported earnings of $2.31 million, or $0.29 per diluted share. 

For the year ended December 31, 2018, net income grew by 36.3% to a record $8.58 million, or $1.06 per diluted share, compared to $6.29 million, or $0.78 per diluted share, for 2017. 

“2018 was a banner year for State Bank Corp. We produced record earnings for the year, highlighted by double digit loan growth, solid net interest income and a healthy net interest margin,” stated Brian M. Riley, President and Chief Executive Officer.  “Overall, these factors contributed to a return on average assets of 1.41% and a return on average equity of 14.53% for the quarter.  We have been successful at keeping operating expenses in check while growing the franchise, and now have both the infrastructure and banking teams in place to continue to grow. 

“Earlier this week, we opened our first full service branch in Phoenix, following the success of our loan production office opened there in May.  Our focus in the coming year remains on expanding market share in Phoenix, while continuing to look for growth opportunities in other Arizona markets,” added Riley.

Fourth Quarter 2018 Financial Highlights:

  • Fourth quarter net income increased 48.2% to $2.28 million, or $0.28 per diluted share.
  • Loans grew $23.0 million to $407.3 million.
  • The net interest margin remained healthy at 4.01%.
  • Return on average assets was 1.41%.
  • Return on average equity was 14.53%.
  • Tangible book value increased 11.5% to $7.10 per share from $6.37 per share a year earlier.

Net interest margin was 4.01% in the fourth quarter 2018 compared to 4.12% in the preceding quarter and 3.86% in the fourth quarter a year ago.  The decreased margin was a result of the recognition of interest income from a resolution of a large nonaccrual loan relationship in the previous quarter.

The provision for loan losses was $137,000 during the fourth quarter of 2018, with net recoveries of $2,000.  The allowance for loan losses totaled $3.8 million at December 31, 2018, or 0.93% of total loans.  Excluding acquired loans, the reserve ratio was 1.02%.  On the acquired portfolio, the credit component of the loan purchase discount remains greater than an imputed reserve.

Total assets were $655.3 million at December 31, 2018, an increase of $34.7 million, or 5.6%, from $620.6 million at December 31, 2017.  Total loans held for investment were $407.3 million as compared to $347.9 million at December 31, 2017, reflecting an increase of 17.0%. 

Total deposits were $557.8 million at year-end, an increase of $8.4 million, or 1.54%, from $549.4 million at December 31, 2017.  Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased to $497.7 million at December 31, 2018, or 2.3%, from $486.8 million at December 31, 2017.  Core deposits now comprise 89.2% of total deposits. 

Nonperforming assets were $1.7 million at December 31, 2018, a decrease from $6.9 million at December 31, 2017.  The decrease primarily consists of two loan relationships that the Company favorably resolved.  Nonperforming assets represented 0.25% of total assets at December 31, 2018. 

Shareholder equity increased to $64.4 million at December 31, 2018, from $58.7 million at December 31, 2017.  At December 31, 2018, tangible book value per share was $7.10 per share compared to $6.37 per share at December 31, 2017. 

Capital Management

State Bank Corp., and State Bank of Arizona, have consolidated capital ratios and Bank capital ratios that exceed the regulatory guidelines for a well-capitalized financial institution under the Basel III and Dodd Frank Wall Street Reform requirements.  The Bank reported the following capital ratios at December 31, 2018:

Common Equity Tier 1 Capital Ratio13.18%
Tier 1 Leverage Ratio10.42%
Tier 1 Capital Ratio
13.18%
Total Capital Ratio13.94%

About the Company

State Bank Corp., headquartered in Lake Havasu City, Arizona, is the parent company of State Bank of Arizona, the largest locally-owned bank in Arizona.  State Bank of Arizona 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.  Specializing in providing exceptional customer service and investing in its local communities, State Bank of Arizona was named 2018 Bank of the Year by Western Independent Bankers.  The Bank has ten full-service branches: two in Lake Havasu City, two in Kingman, two in Prescott, one in Bullhead City, one in Prescott Valley, one in Phoenix, and one in Cottonwood, Arizona.  The Bank also operates a loan production office in Sedona, AZ.  The Company is traded over-the-counter as SBAZ. For further information, please visit the web site: www.statebankaz.com

Forward-looking Statements

This press release may include forward-looking statements about State Bank Corp. and State Bank of Arizona.  These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: the expected cost savings, synergies and other financial benefits from the completed merger might not be realized within the expected time frames or at all. Annualized, pro forma, projected and estimated numbers in this press release are used for illustrative purposes only, are not forecasts and may not reflect actual results. All forward-looking statements included in this press release are based on information available at the time of the release, and State Bank Corp. and State Bank of Arizona assume no obligation to update any forward-looking statements.

UNAUDITED FINANCIAL STATEMENTS FOLLOW

State Bank Corp.      
Statement of Operations      
        
   For the Quarter Ended   Year to Date 
Dollars in thousands - Unaudited12/31/20189/30/201812/31/2017 12/31/201812/31/2017
Statements of Operations      
 Interest income      
 Loans, including fees$  5,612 $  5,548 $  4,926 $  21,251 $  19,539 
 Securities    891    904    855    3,588    2,844 
 Fed funds and other   100     156     87     446     371  
 Total interest income   6,603     6,608     5,868     25,285     22,754  
                 
        
 Interest expense      
 Deposits   338    259    181    1,033    713 
 Borrowings   205     159     108     611     424  
 Total interest expense   543     418     289     1,644     1,137  
 Net interest income   6,060     6,190     5,579     23,641     21,617  
 Provision for loan losses   137     160     100     490     (290)
 Net interest income after loan loss provision   5,923     6,030     5,479     23,151     21,907  
                 
        
 Noninterest income      
 Service charges on deposits   190    170    147    648    575 
 Mortgage loan fees   394    287    294    1,225    1,477 
 Gain on sale of loans   360    366    605    1,744    1,902 
 Other income   618     529     174     2,069     1,250  
 Total noninterest income   1,562     1,352     1,220     5,686     5,204  
                 
        
 Noninterest expense      
 Salaries and employee benefits   2,892    2,644    2,529    10,907    10,121 
 Net occupancy expense   195    234    161    783    671 
 Equipment expense   91    82    91    348    385 
 Data processing   525    470    413    1,871    1,852 
 Director fees & expenses   133    64    152    355    350 
 Insurance   36    25    51    136    146 
 Marketing & promotion   82    234    116    570    531 
 Professional fees   98    177    93    726    425 
 Office expense   62    70    30    141    162 
 Regulatory assessments   53    54    55    228    237 
 OREO and repossessed assets   (95)   29    8    (53)   656 
 Other expenses   672     390     403     1,962     1,671  
 Total noninterest expense   4,744     4,473     4,102     17,974     17,207  
        
 Income (loss) before provision (benefit) for income taxes   2,741     2,909     2,597     10,863     9,904  
                 
        
 Provision (benefit) for income taxes   458     597     1,056     2,282     3,610  
 Net Income (Loss)$  2,283  $  2,312  $  1,541  $  8,581  $  6,294  
        
 Per Share Data       
 Basic EPS $  0.28 $  0.29 $  0.19 $  1.06 $  0.78 
 Diluted EPS $  0.28 $  0.29 $  0.19 $  1.06 $  0.78 
        
  Average shares outstanding       
 Basic    8,065,709    8,065,709    8,044,184    8,060,929    8,039,397 
 Effect of dilutive shares    26,581     27,274     26,340     30,352     18,382  
 Diluted    8,092,290     8,092,983     8,070,524     8,091,281     8,057,779  

 

State Bank Corp.   
Balance Sheets   
     
Dollars in thousands - Unaudited12/31/20189/30/201812/31/2017
Consolidated Balance Sheets   
     
Assets   
 Cash and cash equivalents$  4,061 $  4,185 $  3,558 
 Interest bearing deposits   4,106    5,027    6,835 
 Overnight Funds   17,960    21,321    15,111 
 Available for sale securities   179,589     186,291     206,137  
 Total cash and securities   205,716    216,824    231,641 
     
 Loans held for sale, before reserves   2,375    1,256    3,400 
 Gross loans held for investment   407,264    384,233    347,951 
 Loan loss reserve   (3,824)   (3,736)   (3,306)
 Total net loans   405,815    381,753    348,045 
     
 Premises and equipment, net   14,315    14,284    14,561 
 Other real estate owned   266    266    691 
 Federal Home Loan Bank and other stock   6,249    6,512    3,867 
 Company owned life insurance   11,802    11,737    11,543 
 Goodwill and Core Deposit Intangible   7,054    7,141    7,402 
 Other assets   4,120     4,446     2,887  
     
 Total Assets$  655,337  $  642,963  $  620,637  
     
     
Liabilities   
 Non interest bearing demand$  135,485 $  130,901 $  128,870 
 Money market, NOW and savings   362,202    374,492    357,880 
 Time deposits <$250K   51,845    48,014    58,214 
 Time deposits >$250K   8,299     7,545     4,431  
 Total Deposits   557,831     560,952     549,395  
     
 Securities sold under repurchase agreements   5,001    4,404    3,616 
 Federal Home Loan Bank advances   18,000    6,000    - 
 Subordinated debt, net of debt issuance costs   7,045     7,151     7,361  
 Total Debt   30,046    17,555    10,977 
     
 Other Liabilities   3,086     3,481     1,608  
 Total Liabilities   590,963    581,988    561,980 
     
     
Shareholders' Equity   
 Common stock   39,597    39,556    39,333 
 Accumulated retained earnings   27,831    26,032    21,185 
 Accumulated other comprehensive income   (3,054)   (4,613)   (1,861)
 Total shareholders equity   64,374    60,975    58,657 
     
 Total liabilities and shareholders' equity$  655,337  $  642,963  $  620,637  

 

State Bank Corp.     
Five-Quarter Performance Summary     
      
   For the Quarter Ended 
Dollars in thousands - Unaudited12/31/20189/30/20186/30/20183/31/201812/31/2017
Performance Highlights     
       
Earnings:     
 Total revenue (Net int. income + nonint. income)$  7,622 $  7,542 $  7,259 $  6,903 $  6,799 
 Net interest income$  6,060 $  6,190 $  5,873 $  5,518 $  5,579 
 Provision for loan losses$  137 $  160 $  158 $  35 $  100 
 Noninterest income$  1,562 $  1,352 $  1,386 $  1,385 $  1,220 
 Noninterest expense$  4,744 $  4,473 $  4,303 $  4,453 $  4,102 
 Net income (loss)$  2,283 $  2,312 $  2,137 $  1,849 $  1,541 
       
Per Share Data:     
 Net income (loss), basic $  0.28 $  0.29 $  0.27 $  0.23 $  0.19 
 Net income (loss), diluted $  0.28 $  0.29 $  0.26 $  0.23 $  0.19 
 Cash dividends declared$  0.06 $  0.06 $  0.06 $  0.06 $  0.04 
 Book value$  7.98 $  7.56 $  7.40 $  7.25 $  7.29 
 Tangible book value$  7.10 $  6.67 $  6.50 $  6.34 $  6.37 
       
Performance Ratios:     
 Return on average assets  1.41% 1.44% 1.33% 1.18% 0.98%
 Return on average equity  14.53% 15.19% 14.48% 12.64% 10.52%
 Net interest margin, taxable equivalent 4.01% 4.12% 3.93% 3.78% 3.86%
 Average cost of funds 0.38% 0.29% 0.29% 0.22% 0.20%
 Average yield on loans 5.61% 5.87% 5.68% 5.44% 5.63%
 Efficiency ratio 62.24% 59.31% 59.28% 64.51% 60.33%
 Non-interest income to total revenue 20.49% 17.93% 19.09% 20.06% 17.94%
       
Capital & Liquidity:     
 Total equity to total assets (EOP) 9.82% 9.48% 9.30% 9.26% 9.45%
 Tangible equity to tangible assets 8.47% 8.47% 8.26% 8.20% 8.36%
 Total loans to total deposits 73.43% 68.72% 65.34% 64.73% 63.95%
 State Bank of Arizona     
 Common equity tier 1 ratio 13.18% 13.49% 13.83% 13.98% 14.03%
 Tier 1 leverage ratio 10.42% 10.23% 9.99% 9.91% 9.73%
 Tier 1 risk based capital 13.18% 13.49% 13.83% 13.98% 14.03%
 Total risk based capital  13.94% 14.26% 14.63% 14.75% 14.80%
       
Asset Quality:     
 Gross charge-offs$  - $  77 $  - $  - $  26 
 Net charge-offs (NCOs)$  (2)$  71 $  (82)$  (15)$  (173)
 NCO to average loans, annualized 0.00% 0.08% -0.14% -0.02% -0.20%
 Non-accrual loans/securities$  1,391 $  657 $  2,389 $  5,899 $  6,219 
 Other real estate owned$  266 $  266 $  399 $  529 $  691 
 Repossessed assets $  - $  - $  - $  - $  - 
 Non-performing assets (NPAs)$  1,657 $  923 $  2,788 $  6,428 $  6,910 
 NPAs to total assets 0.25% 0.14% 0.43% 1.02% 1.11%
 Loans >90 days past due$  - $  - $  - $  - $  - 
 NPAs + 90 days past due$  1,657 $  923 $  2,788 $  6,428 $  6,910 
 NPAs + loans 90 days past due to total assets 0.25% 0.14% 0.43% 1.02% 1.11%
 Allowance for loan losses to total loans 0.93% 0.97% 0.99% 0.93% 0.94%
 Allowance for loan losses to NPAs 230.78% 404.77% 134.00% 52.21% 47.84%
       
Period End Balances:     
 Assets$  655,337 $  642,963 $  641,682 $  630,360 $  620,637 
 Total Loans (before reserves)$  409,639 $  385,489 $  367,125 $  361,435 $  351,351 
 Deposits$  557,831 $  560,952 $  561,902 $  558,414 $  549,395 
 Stockholders' equity$  64,374 $  60,975 $  59,664 $  58,381 $  58,657 
 Common stock market capitalization$  99,208 $  117,759 $  126,632 $  97,023 $  88,084 
 Full-time equivalent employees   124    121    122    117    114 
 Shares outstanding   8,065,709    8,065,709    8,065,709    8,051,677    8,044,184 
       
Average Balances:     
 Assets$  649,673 $  644,250 $  640,327 $  627,504 $  626,759 
 Earning assets$  607,149 $  603,271 $  599,968 $  585,574 $  582,297 
 Total Loans (before reserves)$  400,116 $  377,752 $  369,705 $  355,848 $  349,866 
 Deposits$  560,343 $  562,683 $  562,942 $  556,608 $  556,169 
 Other borrowings$  17,649 $  17,596 $  16,622 $  11,028 $  10,226 
 Stockholders' equity$  62,844 $  60,901 $  59,034 $  58,519 $  58,609 
 Shares outstanding, basic - wtd   8,065,709    8,065,709    8,062,225    8,049,845    8,044,184 
 Shares outstanding, diluted - wtd   8,092,290    8,092,983    8,093,024    8,087,524    8,070,524 


Contact:Brian M. Riley, President & CEO
 Craig Wenner, EVP & CFO
 928 855 0000 
 www.mohavestbank.com