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 Ratio | 13.18% |
| Tier 1 Leverage Ratio | 10.42% |
| Tier 1 Capital Ratio | 13.18% |
| Total Capital Ratio | 13.94% |
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 - Unaudited | 12/31/2018 | 9/30/2018 | 12/31/2017 | 12/31/2018 | 12/31/2017 | |||||||||||
| 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 - Unaudited | 12/31/2018 | 9/30/2018 | 12/31/2017 | |||||||
| 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 - Unaudited | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | |||||||||||
| 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 |