LAKE HAVASU CITY, Ariz., Oct. 25, 2019 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCPINK: SBAZ) (“Company”), the holding company for State Bank of Arizona (“Bank”), today announced net income increased 6.1% to $2.39 million, or $0.29 per diluted share, for the third quarter ended September 30, 2019, compared to $2.25 million, or $0.28 per diluted share, for the second quarter of 2019, and increased 3.4% compared to $2.31 million, or $0.29 per diluted share, for the third quarter of 2018. For the first nine months of 2019, net income grew 2.7% to $6.47 million, or $0.80 per diluted share, compared to $6.30 million, or $0.78 per diluted share, for the same period of 2018.
On September 30, 2019, the Company entered into an agreement to merge with the Glacier Bancorp family of banks. Pending shareholder and regulatory approval, State Bank of Arizona and its affiliated bank divisions will officially be under the Glacier Bancorp umbrella late in the fourth quarter of 2019 or early in the first quarter of 2020. This acquisition will see State Bank of Arizona merge into Glacier’s current Arizona bank franchise, Foothills Bank.
“Our core earnings remain strong, as we progress toward our merger with Glacier Bancorp. Our staff has worked extremely hard over the past several years to improve our core operations, and I am proud of their accomplishments” stated Brian M. Riley, President and Chief Executive Officer. “We believe this partnership is a natural fit, and increases our resources to serve clients with exceptional service and strengthens our commitment to continue building a community banking franchise in Arizona. Further, this alliance provides our shareholders with liquidity and significantly enhances our long-term strategic capabilities.”
Third Quarter 2019 Financial Highlights:
- Announced sale of State Bank Corp. to Glacier Bancorp.
- Net income increased 6.1% to $2.39 million, or $0.29 per diluted share, compared to $2.25 million, or $0.28 per diluted share, in 2Q19.
- Return on average assets of 1.41%.
- Return on average equity of 13.23%.
- Core deposits comprised 84.4% of total deposits.
- Tangible book value increased 22.0% to $8.14 per share, compared to $6.67 a year ago.
Net interest margin was 3.78% in the third quarter 2019, compared to 3.75% in the preceding quarter, and 4.01% in the third quarter a year ago. Average cost of funds decreased to 56 basis points, as the Company lowered its overall deposit rates.
There was no provision for loan losses during the third quarter of 2019, with net charge-offs of $1,000. The allowance for loan losses totaled $4.5 million at September 30, 2019, or 1.10% of total loans. Excluding acquired loans, the reserve ratio was 1.17%, which is in line with industry peers. On the acquired portfolio, the credit component of the loan purchase discount remains greater than an imputed reserve.
Total assets were $676.9 million at September 30, 2019, an increase of $21.6 million, or 3.3%, from $655.3 million at December 31, 2018, and an increase of $34.0 million, or 5.3%, compared to $642.9 million a year ago. Total loans held for investment were $397.2 million at September 30, 2019, as compared to $407.3 million at December 31, 2018 and $384.2 million at September 30, 2018.
Total deposits were $586.8 million, an increase of $29.0 million, or 5.2%, from $557.8 million at December 31, 2018, and an increase of $25.9 million, or 4.6%, compared to $560.9 million a year ago. Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, decreased modestly compared to nine months earlier and decreased 2.1% compared to a year earlier to $495.0 million at September 30, 2019. Core deposits now comprise 84.4% of total deposits.
Nonperforming assets were $2.4 million at September 30, 2019, a 50.0% increase from $1.6 million at December 31, 2018. Nonperforming assets represented 0.35% of total assets at September 30, 2019.
Shareholder equity increased to $72.8 million at September 30, 2019, from $64.4 million at December 31, 2018, and compared to $61.0 million a year ago. At September 30, 2019, tangible book value per share improved to$8.14 per share compared to $7.10 per share at December 31, 2018 and $6.67 per share at June 30, 2018.
Capital Management
Community banking organizations, including State Bank Corp. and State Bank of Arizona, became subject to increased 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, 2019. The Bank reported the following capital ratios at September 30, 2019:
| Common Equity Tier 1 Capital Ratio | 14.44% |
| Tier 1 Leverage Ratio | 10.66% |
| Tier 1 Capital Ratio | 14.44% |
| Total Capital Ratio | 15.37% |
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 Company is traded over-the-counter as (“SBAZ”). For further information, please visit the web site: www.statebankaz.com
In June 2019, State Bank Corp. was ranked #69 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts with Assets Under $2 Billion list for 2019 based on three-year average return on equity (“ROE”) as of 12/31/18.
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. 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. | ||||||||||||||||
| Statement of Operations | ||||||||||||||||
| For the Quarter Ended | Year to Date | |||||||||||||||
| Dollars in thousands - Unaudited | 9/30/2019 | 6/30/2019 | 9/30/2018 | 9/30/2019 | 9/30/2018 | |||||||||||
| Statements of Operations | ||||||||||||||||
| Interest income | ||||||||||||||||
| Loans, including fees | $ | 5,806 | $ | 5,905 | $ | 5,548 | $ | 17,638 | $ | 15,639 | ||||||
| Securities | 884 | 861 | 904 | 2,555 | 2,697 | |||||||||||
| Fed funds and other | 271 | 236 | 156 | 673 | 346 | |||||||||||
| Total interest income | 6,961 | 7,002 | 6,608 | 20,866 | 18,682 | |||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 730 | 789 | 259 | 2,063 | 695 | |||||||||||
| Borrowings | 121 | 142 | 159 | 526 | 406 | |||||||||||
| Total interest expense | 851 | 931 | 418 | 2,589 | 1,101 | |||||||||||
| Net interest income | 6,110 | 6,071 | 6,190 | 18,277 | 17,581 | |||||||||||
| Provision for loan losses | - | 50 | 160 | 350 | 353 | |||||||||||
| Net interest income after loan loss provision | 6,110 | 6,021 | 6,030 | 17,927 | 17,228 | |||||||||||
| Noninterest income | ||||||||||||||||
| Service charges on deposits | 181 | 168 | 170 | 527 | 457 | |||||||||||
| Mortgage loan fees | 335 | 329 | 287 | 897 | 831 | |||||||||||
| Gain on sale of loans | 691 | 483 | 366 | 1,564 | 1,384 | |||||||||||
| Other income | 371 | 398 | 529 | 1,251 | 1,451 | |||||||||||
| Total noninterest income | 1,578 | 1,378 | 1,352 | 4,239 | 4,123 | |||||||||||
| Noninterest expense | ||||||||||||||||
| Salaries and employee benefits | 2,910 | 2,807 | 2,644 | 8,635 | 8,015 | |||||||||||
| Net occupancy expense | 207 | 187 | 234 | 586 | 588 | |||||||||||
| Equipment expense | 59 | 66 | 82 | 196 | 257 | |||||||||||
| Data processing | 485 | 514 | 470 | 1,532 | 1,346 | |||||||||||
| Director fees & expenses | 54 | 85 | 64 | 215 | 222 | |||||||||||
| Insurance | 35 | 36 | 25 | 106 | 100 | |||||||||||
| Marketing & promotion | 203 | 101 | 234 | 464 | 488 | |||||||||||
| Professional fees | 247 | 98 | 177 | 503 | 599 | |||||||||||
| Office expense | 32 | 69 | 70 | 105 | 107 | |||||||||||
| Regulatory assessments | 9 | 56 | 54 | 121 | 175 | |||||||||||
| OREO and repossessed assets | 12 | 42 | 29 | 136 | 43 | |||||||||||
| Other expenses | 491 | 463 | 390 | 1,434 | 1,289 | |||||||||||
| Total noninterest expense | 4,744 | 4,524 | 4,473 | 14,033 | 13,229 | |||||||||||
| Income (loss) before provision (benefit) for income taxes | 2,944 | 2,875 | 2,909 | 8,133 | 8,122 | |||||||||||
| Provision (benefit) for income taxes | 554 | 623 | 597 | 1,666 | 1,824 | |||||||||||
| Net Income (Loss) | $ | 2,390 | $ | 2,252 | $ | 2,312 | $ | 6,467 | $ | 6,298 | ||||||
| Per Share Data | ||||||||||||||||
| Basic EPS | $ | 0.30 | $ | 0.28 | $ | 0.29 | $ | 0.80 | $ | 0.78 | ||||||
| Diluted EPS | $ | 0.29 | $ | 0.28 | $ | 0.29 | $ | 0.80 | $ | 0.78 | ||||||
| Average shares outstanding | ||||||||||||||||
| Basic | 8,093,299 | 8,090,000 | 8,065,709 | 8,086,419 | 8,059,318 | |||||||||||
| Effect of dilutive shares | 21,524 | 25,299 | 27,274 | 26,362 | 31,879 | |||||||||||
| Diluted | 8,114,823 | 8,115,299 | 8,092,983 | 8,112,781 | 8,091,197 | |||||||||||
| State Bank Corp. | ||||||||||||||
| Balance Sheets | ||||||||||||||
| Dollars in thousands - Unaudited | 9/30/2019 | 6/30/2019 | 12/31/2018 | 9/30/2018 | ||||||||||
| Consolidated Balance Sheets | ||||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 4,042 | $ | 5,040 | $ | 4,061 | $ | 4,185 | ||||||
| Interest bearing deposits | 6,793 | 5,575 | 4,106 | 5,027 | ||||||||||
| Overnight Funds | 46,030 | 39,485 | 17,960 | 21,320 | ||||||||||
| Available for sale securities | 168,470 | 176,068 | 179,589 | 186,292 | ||||||||||
| Total cash and securities | 225,335 | 226,168 | 205,716 | 216,824 | ||||||||||
| Loans held for sale, before reserves | 15,497 | 7,294 | 2,375 | 1,256 | ||||||||||
| Gross loans held for investment | 397,187 | 406,342 | 407,264 | 384,233 | ||||||||||
| Loan loss reserve | (4,546 | ) | (4,546 | ) | (3,824 | ) | (3,736 | ) | ||||||
| Total net loans | 408,138 | 409,090 | 405,815 | 381,753 | ||||||||||
| Premises and equipment, net | 14,912 | 15,093 | 14,315 | 14,284 | ||||||||||
| Other real estate owned | 307 | - | 266 | 266 | ||||||||||
| Federal Home Loan Bank and other stock | 6,051 | 6,117 | 6,249 | 6,512 | ||||||||||
| Company owned life insurance | 11,489 | 11,424 | 11,802 | 11,737 | ||||||||||
| Other assets | 10,680 | 10,678 | 11,174 | 11,587 | ||||||||||
| Total Assets | $ | 676,912 | $ | 678,570 | $ | 655,337 | $ | 642,963 | ||||||
| Liabilities | ||||||||||||||
| Non interest bearing demand | $ | 136,287 | $ | 141,698 | $ | 135,485 | $ | 130,901 | ||||||
| Money market, NOW and savings | 358,733 | 361,810 | 362,202 | 374,492 | ||||||||||
| Time deposits <$250K | 67,717 | 66,263 | 51,845 | 48,014 | ||||||||||
| Time deposits >$250K | 24,079 | 22,218 | 8,299 | 7,545 | ||||||||||
| Total Deposits | 586,816 | 591,989 | 557,831 | 560,952 | ||||||||||
| Securities sold under repurchase agreements | 7,136 | 6,260 | 5,001 | 4,404 | ||||||||||
| Federal Home Loan Bank advances | 18,000 | 6,000 | ||||||||||||
| Subordinated debt, net of debt issuance costs | 6,690 | 6,806 | 7,045 | 7,151 | ||||||||||
| Total Debt | 13,826 | 13,066 | 30,046 | 17,555 | ||||||||||
| Other Liabilities | 3,519 | 3,001 | 3,086 | 3,481 | ||||||||||
| Total Liabilities | 604,161 | 608,056 | 590,963 | 581,988 | ||||||||||
| Shareholders' Equity | ||||||||||||||
| Common stock | 39,850 | 39,813 | 39,597 | 39,556 | ||||||||||
| Accumulated retained earnings | 32,478 | 30,695 | 27,831 | 26,032 | ||||||||||
| Accumulated other comprehensive income | 423 | 6 | (3,054 | ) | (4,613 | ) | ||||||||
| Total shareholders equity | 72,751 | 70,514 | 64,374 | 60,975 | ||||||||||
| Total liabilities and shareholders' equity | $ | 676,912 | $ | 678,570 | $ | 655,337 | $ | 642,963 | ||||||
| State Bank Corp. | ||||||||||||||||
| Five-Quarter Performance Summary | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| Dollars in thousands - Unaudited | 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||
| Performance Highlights | ||||||||||||||||
| Earnings: | ||||||||||||||||
| Total revenue (Net int. income + nonint. income) | $ | 7,688 | $ | 7,449 | $ | 7,379 | $ | 7,622 | $ | 7,542 | ||||||
| Net interest income | $ | 6,110 | $ | 6,071 | $ | 6,095 | $ | 6,060 | $ | 6,190 | ||||||
| Provision for loan losses | $ | - | $ | 50 | $ | 300 | $ | 137 | $ | 160 | ||||||
| Noninterest income | $ | 1,578 | $ | 1,378 | $ | 1,284 | $ | 1,562 | $ | 1,352 | ||||||
| Noninterest expense | $ | 4,744 | $ | 4,524 | $ | 4,766 | $ | 4,744 | $ | 4,473 | ||||||
| Net income (loss) | $ | 2,390 | $ | 2,252 | $ | 1,824 | $ | 2,283 | $ | 2,312 | ||||||
| Per Share Data: | ||||||||||||||||
| Net income (loss), basic | $ | 0.30 | $ | 0.28 | $ | 0.23 | $ | 0.28 | $ | 0.29 | ||||||
| Net income (loss), diluted | $ | 0.29 | $ | 0.28 | $ | 0.22 | $ | 0.28 | $ | 0.29 | ||||||
| Cash dividends declared | $ | 0.075 | $ | 0.075 | $ | 0.075 | $ | 0.06 | $ | 0.06 | ||||||
| Book value | $ | 8.99 | $ | 8.71 | $ | 8.28 | $ | 7.98 | $ | 7.56 | ||||||
| Tangible book value | $ | 8.14 | $ | 7.86 | $ | 7.42 | $ | 7.10 | $ | 6.67 | ||||||
| Performance Ratios: | ||||||||||||||||
| Return on average assets | 1.41 | % | 1.32 | % | 1.10 | % | 1.41 | % | 1.44 | % | ||||||
| Return on average equity | 13.23 | % | 13.07 | % | 11.06 | % | 14.53 | % | 15.19 | % | ||||||
| Net interest margin, taxable equivalent | 3.78 | % | 3.75 | % | 3.85 | % | 3.90 | % | 4.01 | % | ||||||
| Average cost of funds | 0.56 | % | 0.61 | % | 0.54 | % | 0.38 | % | 0.29 | % | ||||||
| Average yield on loans | 5.63 | % | 5.68 | % | 5.70 | % | 5.61 | % | 5.87 | % | ||||||
| Efficiency ratio | 61.71 | % | 60.73 | % | 64.59 | % | 62.24 | % | 59.31 | % | ||||||
| Non-interest income to total revenue | 20.53 | % | 18.50 | % | 17.40 | % | 20.49 | % | 17.93 | % | ||||||
| Capital & Liquidity: | ||||||||||||||||
| Total equity to total assets (EOP) | 10.75 | % | 10.39 | % | 9.94 | % | 9.82 | % | 9.48 | % | ||||||
| Tangible equity to tangible assets | 9.84 | % | 9.47 | % | 9.00 | % | 8.84 | % | 8.47 | % | ||||||
| Total loans to total deposits | 70.33 | % | 69.87 | % | 71.25 | % | 73.43 | % | 68.72 | % | ||||||
| Mohave State Bank | ||||||||||||||||
| Common equity tier 1 ratio | 14.44 | % | 13.91 | % | 13.49 | % | 13.18 | % | 13.49 | % | ||||||
| Tier 1 leverage ratio | 10.66 | % | 10.40 | % | 10.39 | % | 10.42 | % | 10.23 | % | ||||||
| Tier 1 risk based capital | 14.44 | % | 13.91 | % | 13.49 | % | 13.18 | % | 13.49 | % | ||||||
| Total risk based capital | 15.37 | % | 14.83 | % | 14.32 | % | 13.94 | % | 14.26 | % | ||||||
| Asset Quality: | ||||||||||||||||
| Gross charge-offs | $ | 2 | $ | 15 | $ | 88 | $ | - | $ | 77 | ||||||
| Net charge-offs (NCOs) | $ | 1 | $ | (356 | ) | $ | (15 | ) | $ | (2 | ) | $ | 71 | |||
| NCO to average loans, annualized | 0.00 | % | -0.34 | % | -0.01 | % | -0.00 | % | 0.08 | % | ||||||
| Non-accrual loans/securities | $ | 2,051 | $ | 2,415 | $ | 1,302 | $ | 1,391 | $ | 657 | ||||||
| Other real estate owned | $ | 307 | $ | - | $ | 174 | $ | 266 | $ | 266 | ||||||
| Repossessed assets | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||
| Non-performing assets (NPAs) | $ | 2,358 | $ | 2,415 | $ | 1,476 | $ | 1,657 | $ | 923 | ||||||
| NPAs to total assets | 0.35 | % | 0.36 | % | 0.22 | % | 0.25 | % | 0.14 | % | ||||||
| Loans >90 days past due | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||
| NPAs + 90 days past due | $ | 2,358 | $ | 2,415 | $ | 1,476 | $ | 1,657 | $ | 923 | ||||||
| NPAs + loans 90 days past due to total assets | 0.35 | % | 0.36 | % | 0.22 | % | 0.25 | % | 0.14 | % | ||||||
| Allowance for loan losses to total loans | 1.10 | % | 1.10 | % | 0.99 | % | 0.93 | % | 0.97 | % | ||||||
| Allowance for loan losses to NPAs | 192.79 | % | 188.24 | % | 280.42 | % | 230.78 | % | 404.77 | % | ||||||
| Period End Balances: | ||||||||||||||||
| Assets | $ | 676,912 | $ | 678,570 | $ | 673,336 | $ | 655,337 | $ | 642,963 | ||||||
| Total Loans (before reserves) | $ | 412,684 | $ | 413,636 | $ | 417,333 | $ | 409,639 | $ | 385,489 | ||||||
| Deposits | $ | 586,816 | $ | 591,989 | $ | 585,732 | $ | 557,831 | $ | 560,952 | ||||||
| Stockholders' equity | $ | 72,751 | $ | 70,514 | $ | 66,919 | $ | 64,374 | $ | 60,975 | ||||||
| Common stock market capitalization | $ | 105,213 | $ | 97,120 | $ | 104,646 | $ | 99,208 | $ | 117,759 | ||||||
| Full-time equivalent employees | 120 | 120 | 122 | 124 | 121 | |||||||||||
| Shares outstanding | 8,093,299 | 8,093,299 | 8,080,791 | 8,065,709 | 8,065,709 | |||||||||||
| Average Balances: | ||||||||||||||||
| Assets | $ | 680,038 | $ | 680,037 | $ | 664,121 | $ | 649,673 | $ | 644,250 | ||||||
| Earning assets | $ | 649,501 | $ | 650,744 | $ | 636,755 | $ | 623,584 | $ | 619,541 | ||||||
| Total Loans (before reserves) | $ | 412,295 | $ | 415,774 | $ | 415,998 | $ | 400,116 | $ | 377,752 | ||||||
| Deposits | $ | 591,694 | $ | 596,079 | $ | 562,399 | $ | 560,343 | $ | 562,683 | ||||||
| Other borrowings | $ | 13,422 | $ | 12,457 | $ | 33,995 | $ | 17,649 | $ | 17,596 | ||||||
| Stockholders' equity | $ | 72,272 | $ | 68,902 | $ | 65,986 | $ | 62,844 | $ | 60,901 | ||||||
| Shares outstanding, basic - wtd | 8,093,299 | 8,090,000 | 8,075,764 | 8,065,709 | 8,065,709 | |||||||||||
| Shares outstanding, diluted - wtd | 8,114,823 | 8,115,299 | 8,108,423 | 8,092,290 | 8,092,983 | |||||||||||
| Contact: | Brian M. Riley, President & CEO |
| Craig Wenner, EVP & CFO | |
| 928 855 0000 | |
| www.mohavestbank.com |