LAKE HAVASU CITY, Ariz., Oct. 26, 2015 (GLOBE NEWSWIRE) — State Bank Corp. (OTCQB:SBAZ) (“Company”), the holding company for Mohave State Bank (“Bank”), today announced net income increased 38.2% to $1,067,000, or $0.18 per diluted share, for the third quarter ended September 30, 2015, compared to $772,000, or $0.13 per diluted share, in the second quarter of 2015 and increased 74.3% compared to $612,000, or $0.10 per diluted share, for the third quarter of 2014. The current quarter results included a $735,000 pre-tax gross gain resulting from the sale of the Bank’s Yuma branch on September 4, 2015.
For the nine months ended September 30, 2015, net income totaled $2.52 million, or $0.43 per diluted share, compared to $4.88 million, or $0.83 per diluted share, for the same period of 2014. 2014 results included a $3.24 million tax benefit as a result of the reversal of its deferred tax asset valuation allowance. Pretax income increased 96.5% to $3.88 million in the first nine months of 2015 compared to $1.97 million in the first nine months of 2014.
“Our solid third quarter results reflect the progress we are making in building a strong franchise in the Western Arizona markets that we serve. Total loans grew by $14.4 million, or 7.1% year-over-year, and at the same time our net interest margin expanded 16 basis points from the third quarter a year ago to 4.31%,” stated Brian M. Riley, President and Chief Executive Officer. “The greater Arizona economy continues to show strong economic activity resulting in increased loan demand and solid core deposit growth. We are well positioned to take advantage of new growth opportunities in our markets which are benefitting from growing tourist volumes and the in-migration of retirees.”
Third Quarter 2015 Financial Highlights:
- Net income increased 38.2% to $1.07 million in the third quarter, compared to $612,000 in the third quarter 2014.
- Recognized a pre-tax gross gain of $735,000 on the sale of the Yuma branch, based on a deposit premium of 4.45%.
- The net interest margin increased to 4.31% compared to 4.15% in the third quarter of 2014.
- Non-performing assets decreased to $10.7 million at quarter-end and further improved to $8.0 million following the end of the third quarter, reflecting continued resolution of problem credits and the sale of three foreclosed assets. As of October 9, 2015, nonperforming assets to total assets was 2.5%.
- Tangible book value per share increased 7.6% to $6.34 per share, compared to $5.89 a year ago.
“The net interest margin continued to expand this quarter, largely due to our reduced cost of funds,” added Riley. The net interest margin was 4.31% in the third quarter 2015 compared to 4.22% in the preceding quarter and 4.15% in the third quarter a year ago.
The provision for loan losses totaled $425,000 in the third quarter against net credit losses of $370,000. The allowance for loan losses totaled $3.0 million at September 30, 2015, or 1.39% of loans held for investment. The net credit loss resulted from a charge-off of a credit relationship that was previously provided for in the Bank’s impairment process.
Total assets increased 2.5% to $325.1 million at September 30, 2015, from $317.2 million at December 31, 2014 and 2.3% compared to $317.6 million a year ago. Total loans held for investment were $216.8 million as compared to $209.0 million at December 31, 2014 and $202.4 million at September 30, 2014. Total loan comparisons were affected by the sale of loans from the Yuma branch of $11.1 million.
Total deposits were $283.0 million, an increase of $5.5 million, or 2.0%, from $277.5 million at December 31, 2014 and an increase of $6.3 million, or 2.3%, compared to $276.7 million a year ago. Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, decreased 4.4% compared to three months earlier and increased 4.45% compared to a year earlier to $223.9 million at September 30, 2015. Total deposits and core deposit comparisons were affected by the sale of deposits from the Yuma branch of $16.5 million and $12.8 million, respectively. Core deposits now comprise 79.1% of total deposits.
Nonperforming assets were $10.7 million at September 30, 2015, a 27.8% decrease compared to $14.8 million at December 31, 2014 and a 37.9% decrease compared to $17.2 million at September 30, 2014. Nonperforming assets represented 3.29% of total assets at September 30, 2015, down from 4.67% at December 31, 2014 and 5.43% a year ago.
Shareholder equity increased to $37.2 million at September 30, 2015, from $35.1 million at December 31, 2014 and $34.5 million a year earlier. At September 30, 2015 tangible book value per share improved to $6.34 per share compared to $5.99 per share at December 31, 2014 and $5.89 a year earlier.
During the third quarter the company repurchased 7,038 shares of SBAZ stock at an average price of $5.29 per share.
Capital Management
Community banking organizations, including State Bank Corp. and Mohave State Bank, became subject to new capital requirements on January 1, 2015, and certain provisions of the new rules will be phased in from 2015 through 2019. The Company’s consolidated capital ratios and the Bank’s capital ratios exceeded the regulatory guidelines for a well-capitalized financial institution under the Basel III and Dodd Frank Wall Street Reform requirements at September 30, 2015. The Bank reported the following capital ratios at September 30, 2015:
| Common Equity Tier 1 Capital Ratio | 14.10% |
| Tier 1 Leverage Ratio | 10.83% |
| Tier 1 Capital Ratio | 14.10% |
| Total Capital Ratio | 15.27% |
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 five full-service branches: two in Lake Havasu City, two in Kingman, and one in Bullhead City, 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 | 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 |
| Performance Highlights | |||||
| Earnings: | |||||
| Total revenue (Net int. income + nonint. income) | $ 4,651 | $ 4,123 | $ 3,965 | $ 3,740 | $ 3,668 |
| Net interest income | $ 3,255 | $ 3,118 | $ 2,864 | $ 2,837 | $ 2,793 |
| Provision for loan losses | $ 425 | $ 350 | $ 110 | $ 75 | $ 250 |
| Noninterest income | $ 1,396 | $ 1,005 | $ 1,101 | $ 903 | $ 875 |
| Noninterest expense | $ 2,568 | $ 2,588 | $ 2,821 | $ 3,068 | $ 2,471 |
| Net income (loss) | $ 1,067 | $ 772 | $ 681 | $ 517 | $ 612 |
| Per Share Data: | |||||
| Net income (loss), basic | $ 0.18 | $ 0.13 | $ 0.12 | $ 0.09 | $ 0.10 |
| Net income (loss), diluted | $ 0.18 | $ 0.13 | $ 0.12 | $ 0.09 | $ 0.10 |
| Cash dividends declared | $ — | $ — | $ 0.07 | $ — | $ — |
| Book value | $ 6.34 | $ 6.13 | $ 6.04 | $ 5.99 | $ 5.89 |
| Tangible book value | $ 6.34 | $ 6.13 | $ 6.04 | $ 5.99 | $ 5.89 |
| Performance Ratios: | |||||
| Return on average assets | 1.26% | 0.93% | 0.85% | 0.65% | 0.79% |
| Return on average equity | 11.63% | 8.59% | 7.68% | 5.91% | 7.12% |
| Net interest margin, taxable equivalent | 4.31% | 4.22% | 4.09% | 4.07% | 4.15% |
| Average cost of funds | 0.21% | 0.21% | 0.21% | 0.22% | 0.22% |
| Average yield on loans | 5.42% | 5.30% | 5.18% | 5.33% | 5.31% |
| Efficiency ratio | 55.21% | 62.77% | 71.15% | 82.03% | 67.37% |
| Non-interest income to total revenue | 30.02% | 24.38% | 27.77% | 24.14% | 23.85% |
| Capital & Liquidity: | |||||
| Total equity to total assets (EOP) | 11.43% | 10.60% | 10.80% | 11.08% | 10.88% |
| Tangible equity to tangible assets | 11.43% | 10.60% | 10.80% | 11.08% | 10.88% |
| Total loans to total deposits | 78.00% | 78.83% | 74.50% | 75.01% | 73.44% |
| Mohave State Bank | |||||
| Common equity tier 1 ratio | 14.10% | 12.71% | 13.36% | ||
| Tier 1 leverage ratio | 10.83% | 10.72% | 10.92% | 10.39% | 10.34% |
| Tier 1 risk based capital | 14.10% | 12.71% | 13.36% | 13.70% | 13.49% |
| Total risk based capital | 15.27% | 13.77% | 14.52% | 14.93% | 14.75% |
| Asset Quality: | |||||
| Gross charge-offs | $ 373 | $ 449 | $ 124 | $ 351 | $ — |
| Net charge-offs (NCOs) | $ 370 | $ 415 | $ 30 | $ 313 | $ (19) |
| NCO to average loans, annualized | 0.63% | 0.73% | 0.06% | 0.60% | -0.04% |
| Non-accrual loans/securities | $ 4,570 | $ 3,732 | $ 6,444 | $ 5,522 | $ 5,975 |
| Other real estate owned | $ 6,141 | $ 6,696 | $ 7,595 | $ 9,307 | $ 11,268 |
| Repossessed assets | $ — | $ — | $ — | $ — | $ — |
| Non-performing assets (NPAs) | $ 10,711 | $ 10,428 | $ 14,039 | $ 14,829 | $ 17,243 |
| NPAs to total assets | 3.29% | 3.08% | 4.28% | 4.67% | 5.43% |
| Loans >90 days past due | $ — | $ — | $ — | $ — | $ — |
| NPAs + 90 days past due | $ 10,711 | $ 10,428 | $ 14,039 | $ 14,829 | $ 17,243 |
| NPAs + loans 90 days past due to total assets | 3.29% | 3.08% | 4.28% | 4.67% | 5.43% |
| Allowance for loan losses to total loans | 1.37% | 1.26% | 1.42% | 1.42% | 1.57% |
| Allowance for loan losses to NPAs | 28.23% | 28.47% | 21.61% | 19.92% | 18.52% |
| Period End Balances: | |||||
| Assets | $ 325,104 | $ 339,109 | $ 328,302 | $ 317,215 | $ 317,648 |
| Total Loans (before reserves) | $ 220,768 | $ 241,666 | $ 217,245 | $ 210,312 | $ 205,239 |
| Deposits | $ 283,035 | $ 297,928 | $ 287,237 | $ 277,493 | $ 276,716 |
| Stockholders’ equity | $ 37,166 | $ 35,951 | $ 35,470 | $ 35,137 | $ 34,575 |
| Common stock market capitalization | $ 35,166 | $ 27,873 | $ 29,575 | $ 29,340 | $ 27,991 |
| Full-time equivalent employees | 76 | 81 | 81 | 80 | 80 |
| Shares outstanding | 5,861,000 | 5,868,038 | 5,868,038 | 5,868,038 | 5,868,038 |
| Average Balances: | |||||
| Assets | $ 337,463 | $ 333,387 | $ 319,817 | $ 318,835 | $ 309,367 |
| Earning assets | $ 307,376 | $ 301,427 | $ 285,722 | $ 283,657 | $ 273,449 |
| Total Loans (before reserves) | $ 235,051 | $ 228,847 | $ 214,992 | $ 207,130 | $ 205,025 |
| Deposits | $ 295,327 | $ 291,980 | $ 279,305 | $ 277,947 | $ 269,083 |
| Other borrowings | $ 4,327 | $ 4,817 | $ 4,481 | $ 4,481 | $ 4,737 |
| Stockholders’ equity | $ 36,689 | $ 35,947 | $ 35,454 | $ 34,975 | $ 34,365 |
| Shares outstanding, basic – wtd | 5,866,038 | 5,868,038 | 5,868,038 | 5,868,038 | 5,868,038 |
| Shares outstanding, diluted – wtd | 5,866,038 | 5,868,038 | 5,868,038 | 5,868,038 | 5,868,038 |
| State Bank Corp. | |||
| Balance Sheets | |||
| Dollars in thousands – Unaudited | 9/30/2015 | 12/31/2014 | 9/30/2014 |
| Consolidated Balance Sheets | |||
| Assets | |||
| Cash and cash equivalents | $ 1,777 | $ 1,679 | $ 1,954 |
| Interest bearing deposits | 4,033 | 3,459 | 3,958 |
| Overnight Funds | 25,150 | 31,740 | 37,900 |
| Held for maturity securities | 21 | 27 | 30 |
| Available for sale securities | 49,323 | 39,814 | 36,541 |
| Total cash and securities | 80,304 | 76,719 | 80,383 |
| Loans held for sale, before reserves | 3,928 | 1,300 | 2,825 |
| Gross loans held for investment | 216,840 | 209,012 | 202,414 |
| Loan loss reserve | (3,024) | (2,954) | (3,193) |
| Total net loans | 217,744 | 207,358 | 202,046 |
| Premises and equipment, net | 8,235 | 9,892 | 9,906 |
| Other real estate owned | 6,141 | 9,307 | 11,268 |
| Federal Home Loan Bank and other stock | 2,126 | 1,917 | 1,917 |
| Company owned life insurance | 5,993 | 5,871 | 5,830 |
| Other assets | 4,561 | 6,151 | 6,298 |
| Total Assets | $ 325,104 | $ 317,215 | $ 317,648 |
| Liabilities | |||
| Non interest bearing demand | $ 69,529 | $ 62,612 | $ 63,772 |
| Money market, NOW and savings | 154,337 | 152,308 | 150,553 |
| Time deposits <$100K | 26,018 | 25,929 | 31,041 |
| Time deposits >$100K | 33,151 | 36,644 | 31,350 |
| Total Deposits | 283,035 | 277,493 | 276,716 |
| Securities sold under repurchase agreements | 3,657 | 2,734 | 4,240 |
| Federal Home Loan Bank advances | — | — | — |
| Subordinated debt | — | 675 | 675 |
| Total Debt | 3,657 | 3,409 | 4,915 |
| Other Liabilities | 1,246 | 1,176 | 1,442 |
| Total Liabilities | 287,938 | 282,078 | 283,073 |
| Shareholders’ Equity | |||
| Common stock | 25,007 | 25,037 | 25,037 |
| Accumulated retained earnings | 11,968 | 9,866 | 9,349 |
| Accumulated other comprehensive income | 191 | 234 | 189 |
| Total shareholders equity | 37,166 | 35,137 | 34,575 |
| Total liabilities and shareholders’ equity | $ 325,104 | $ 317,215 | $ 317,648 |
| State Bank Corp. | |||||
| Statement of Operations | |||||
| For the Quarter Ended | Year to Date | ||||
| Dollars in thousands – Unaudited | 9/30/2015 | 6/30/2015 | 9/30/2014 | 9/30/2015 | 9/30/2014 |
| Statements of Operations | |||||
| Interest income | |||||
| Loans, including fees | $ 3,186 | $ 3,031 | $ 2,723 | $ 9,000 | $ 8,098 |
| Securities | 209 | 224 | 205 | 646 | 604 |
| Fed funds and other | 14 | 17 | 18 | 47 | 44 |
| Total interest income | 3,409 | 3,272 | 2,946 | 9,693 | 8,746 |
| Interest expense | |||||
| Deposits | 153 | 143 | 139 | 429 | 411 |
| Borrowings | 1 | 11 | 14 | 26 | 42 |
| Total interest expense | 154 | 154 | 153 | 455 | 453 |
| Net interest income | 3,255 | 3,118 | 2,793 | 9,238 | 8,293 |
| Provision for loan losses | 425 | 350 | 250 | 885 | 620 |
| Net interest income after loan loss provision | 2,830 | 2,768 | 2,543 | 8,353 | 7,673 |
| Noninterest income | |||||
| Service charges on deposits | 89 | 88 | 104 | 273 | 312 |
| Mortgage loan fees | 241 | 304 | 113 | 738 | 282 |
| Gain on sale of loans | 180 | 405 | 510 | 1,239 | 833 |
| (Loss)/Gain on securities | — | — | — | (8) | (42) |
| Other income | 886 | 208 | 148 | 1,261 | 553 |
| Total noninterest income | 1,396 | 1,005 | 875 | 3,503 | 1,938 |
| Noninterest expense | |||||
| Salaries and employee benefits | 1,447 | 1,457 | 1,315 | 4,430 | 3,923 |
| Net occupancy expense | 102 | 96 | 97 | 278 | 283 |
| Equipment expense | 47 | 43 | 39 | 131 | 115 |
| Data processing | 246 | 292 | 276 | 826 | 797 |
| Director fees & expenses | 55 | 63 | 41 | 166 | 140 |
| Insurance | 26 | 26 | 29 | 77 | 89 |
| Marketing & promotion | 57 | 81 | 82 | 265 | 250 |
| Professional fees | 82 | 80 | 97 | 254 | 399 |
| Office expense | 28 | 30 | 30 | 93 | 81 |
| Regulatory assessments | 106 | 100 | 69 | 321 | 330 |
| OREO and repossessed assets | 214 | 111 | 247 | 611 | 788 |
| Other expenses | 158 | 209 | 149 | 526 | 442 |
| Total noninterest expense | 2,568 | 2,588 | 2,471 | 7,978 | 7,637 |
| Income (loss) before provision (benefit) for income taxes | 1,658 | 1,185 | 947 | 3,878 | 1,974 |
| Provision (benefit) for income taxes | 591 | 413 | 335 | 1,358 | (2,905) |
| Net Income (Loss) | $ 1,067 | $ 772 | $ 612 | $ 2,520 | $ 4,879 |
| Per Share Data | |||||
| Basic EPS | $ 0.18 | $ 0.13 | $ 0.10 | $ 0.43 | $ 0.83 |
| Diluted EPS | $ 0.18 | $ 0.13 | $ 0.10 | $ 0.43 | $ 0.83 |
| Average shares outstanding | |||||
| Basic | 5,866,038 | 5,868,038 | 5,868,038 | 5,867,364 | 5,868,038 |
| Effect of dilutive shares | — | — | — | — | — |
| Diluted | 5,866,038 | 5,868,038 | 5,868,038 | 5,867,364 | 5,868,038 |
CONTACT: Brian M. Riley, President & CEO
Craig Wenner, EVP & CFO
928 855 0000
www.mohavestbank.com