LAKE HAVASU CITY, Ariz., April 26, 2019 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCPINK:SBAZ)(“Company”), the holding company for State Bank of Arizona (“Bank”), today announced net income of $1.82 million, or $0.22 per diluted share, for the first quarter ended March 31, 2019, as compared to net income of $1.85 million, or $0.23 per diluted share, for the first quarter of 2018. In the preceding quarter, the Company reported earnings of $2.28 million, or $0.28 per diluted share.
“Our first quarter financial results were highlighted by strong loan and core deposit growth and solid net interest income,” stated Brian M. Riley, President and Chief Executive Officer. “Another highlight of the quarter was the opening of our first full service branch in Phoenix, following the success of our loan production office opened there in May 2018. The continued focus on delivering value to our clients combined with the strength of the economy in the Arizona markets we serve continues to sustain and build our community banking franchise.”
First Quarter 2019 Financial Highlights:
• Net income was $1.82 million, or $0.22 per diluted share.
• Opens full service branch in Phoenix, Arizona.
• Return on average assets of 1.02%.
• Return on average equity of 11.06%.
• Core deposits comprised 86.7% of total deposits.
• Tangible book value increased 17.0% to $7.42 per share from $6.34 per share a year earlier.
Net interest margin was 3.95% in the first quarter 2019 compared to 4.01% in the preceding quarter and 3.78% in the first quarter a year ago. Average cost of funds rose to 54 basis points, as the Company increased overall deposit rates to remain competitive in the market place.
The provision for loan losses was $300,000 during the first quarter of 2019, with net recoveries of $15,000. The allowance for loan losses totaled $4.1 million at March 31, 2019, or 0.99% of total loans. Excluding acquired loans, the reserve ratio was 1.08%, 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 $673.3 million at March 31, 2019, an increase of $18.0 million, or 2.75%, from $655.3 million at December 31, 2018 and an increase of $42.9 million, or 6.81%, compared to $630.4 million a year ago. Total loans held for investment were $411.2 million as compared to $407.3 million at December 31, 2018 and $358.8 million at March 31, 2018.
Total deposits were $585.7 million, an increase of $27.9 million, or 5.00%, from $557.8 million at December 31, 2018 and an increase of $27.3 million, or 4.89%, compared to $558.4 million a year ago. Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased 2.03% compared to three months earlier and increased 1.76% compared to a year earlier to $507.8 million at March 31, 2019. Core deposits now comprise 86.7% of total deposits.
Nonperforming assets were $1.5 million at March 31, 2019, an 11.76% decrease from $1.7 million at December 31, 2018. Nonperforming assets represented 0.22% of total assets at March 31, 2019.
Shareholder equity increased to $66.9 million at March 31, 2019, from $64.4 million at December 31, 2018. At March 31, 2019, tangible book value per share was $7.42 per share compared to $7.10 per share at December 31, 2018.
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 March 31, 2019:
| Common Equity Tier 1 Capital Ratio | 13.49% |
| Tier 1 Leverage Ratio | 10.39% |
| Tier 1 Capital Ratio | 13.49% |
| Total Capital Ratio | 14.32% |
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 website: 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. 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 | |||||||||
| Dollars in thousands - Unaudited | 3/31/2019 | 12/31/2018 | 3/31/2018 | ||||||
| Statements of Operations | |||||||||
| Interest income | |||||||||
| Loans, including fees | $ | 5,926 | $ | 5,612 | $ | 4,842 | |||
| Securities | 809 | 891 | 897 | ||||||
| Fed funds and other | 166 | 100 | 90 | ||||||
| Total interest income | 6,901 | 6,603 | 5,829 | ||||||
| Interest expense | |||||||||
| Deposits | 544 | 338 | 206 | ||||||
| Borrowings | 262 | 205 | 105 | ||||||
| Total interest expense | 806 | 543 | 311 | ||||||
| Net interest income | 6,095 | 6,060 | 5,518 | ||||||
| Provision for loan losses | 300 | 137 | 35 | ||||||
| Net interest income after loan loss provision | 5,795 | 5,923 | 5,483 | ||||||
| Noninterest income | |||||||||
| Service charges on deposits | 178 | 190 | 148 | ||||||
| Mortgage loan fees | 233 | 394 | 247 | ||||||
| Gain on sale of loans | 390 | 360 | 442 | ||||||
| Other income | 483 | 618 | 548 | ||||||
| Total noninterest income | 1,284 | 1,562 | 1,385 | ||||||
| Noninterest expense | |||||||||
| Salaries and employee benefits | 2,919 | 2,892 | 2,695 | ||||||
| Net occupancy expense | 192 | 195 | 183 | ||||||
| Equipment expense | 71 | 91 | 92 | ||||||
| Data processing | 532 | 525 | 440 | ||||||
| Director fees & expenses | 76 | 133 | 80 | ||||||
| Insurance | 35 | 36 | 39 | ||||||
| Marketing & promotion | 160 | 82 | 129 | ||||||
| Professional fees | 81 | 98 | 149 | ||||||
| Office expense | 81 | 62 | 38 | ||||||
| Regulatory assessments | 56 | 53 | 64 | ||||||
| OREO and repossessed assets | 82 | (95 | ) | 42 | |||||
| Other expenses | 481 | 672 | 502 | ||||||
| Total noninterest expense | 4,766 | 4,744 | 4,453 | ||||||
| Income (loss) before provision (benefit) for income taxes | 2,313 | 2,741 | 2,415 | ||||||
| Provision (benefit) for income taxes | 489 | 458 | 566 | ||||||
| Net Income (Loss) | $ | 1,824 | $ | 2,283 | $ | 1,849 | |||
| Per Share Data | |||||||||
| Basic EPS | $ | 0.23 | $ | 0.28 | $ | 0.23 | |||
| Diluted EPS | $ | 0.22 | $ | 0.28 | $ | 0.23 | |||
| Average shares outstanding | |||||||||
| Basic | 8,075,764 | 8,065,709 | 8,049,845 | ||||||
| Effect of dilutive shares | 32,659 | 26,581 | 37,679 | ||||||
| Diluted | 8,108,423 | 8,092,290 | 8,087,524 | ||||||
| State Bank Corp. | ||||||||||
| Balance Sheets | ||||||||||
| Dollars in thousands - Unaudited | 3/31/2019 | 12/31/2018 | 3/31/2018 | |||||||
| Consolidated Balance Sheets | ||||||||||
| Assets | ||||||||||
| Cash and cash equivalents | $ | 4,319 | $ | 4,061 | $ | 4,419 | ||||
| Interest bearing deposits | 8,376 | 4,106 | 6,658 | |||||||
| Overnight Funds | 34,030 | 17,960 | 21,055 | |||||||
| Available for sale securities | 170,374 | 179,589 | 199,932 | |||||||
| Total cash and securities | 217,099 | 205,716 | 232,064 | |||||||
| Loans held for sale, before reserves | 6,174 | 2,375 | 2,624 | |||||||
| Gross loans held for investment | 411,159 | 407,264 | 358,811 | |||||||
| Loan loss reserve | (4,139 | ) | (3,824 | ) | (3,356 | ) | ||||
| Total net loans | 413,194 | 405,815 | 358,079 | |||||||
| Premises and equipment, net | 15,171 | 14,315 | 14,152 | |||||||
| Other real estate owned | 174 | 266 | 528 | |||||||
| Federal Home Loan Bank and other stock | 6,183 | 6,249 | 3,867 | |||||||
| Company owned life insurance | 11,360 | 11,802 | 11,607 | |||||||
| Other assets | 10,155 | 11,174 | 10,063 | |||||||
| Total Assets | $ | 673,336 | $ | 655,337 | $ | 630,360 | ||||
| Liabilities | ||||||||||
| Non interest bearing demand | $ | 136,761 | $ | 135,485 | $ | 126,307 | ||||
| Money market, NOW and savings | 371,021 | 362,202 | 372,706 | |||||||
| Time deposits <$250K | 60,417 | 51,845 | 54,811 | |||||||
| Time deposits >$250K | 17,533 | 8,299 | 4,590 | |||||||
| Total Deposits | 585,732 | 557,831 | 558,414 | |||||||
| Securities sold under repurchase agreements | 5,176 | 5,001 | 4,339 | |||||||
| Federal Home Loan Bank advances | 6,000 | 18,000 | - | |||||||
| Subordinated debt, net of debt issuance costs | 6,953 | 7,045 | 7,367 | |||||||
| Total Debt | 18,129 | 30,046 | 11,706 | |||||||
| Other Liabilities | 2,556 | 3,086 | 1,859 | |||||||
| Total Liabilities | 606,417 | 590,963 | 571,979 | |||||||
| Shareholders' Equity | ||||||||||
| Common stock | 3,976 | 39,597 | 39,466 | |||||||
| Accumulated retained earnings | 64,835 | 27,831 | 22,551 | |||||||
| Accumulated other comprehensive income | (1,892 | ) | (3,054 | ) | (3,636 | ) | ||||
| Total shareholders equity | 66,919 | 64,374 | 58,381 | |||||||
| Total liabilities and shareholders' equity | $ | 673,336 | $ | 655,337 | $ | 630,360 | ||||
| State Bank Corp. | ||||||||||||||||
| Five-Quarter Performance Summary | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| Dollars in thousands - Unaudited | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | |||||||||||
| Performance Highlights | ||||||||||||||||
| Earnings: | ||||||||||||||||
| Total revenue (Net int. income + nonint. income) | $ | 7,379 | $ | 7,622 | $ | 7,542 | $ | 7,259 | $ | 6,903 | ||||||
| Net interest income | $ | 6,095 | $ | 6,060 | $ | 6,190 | $ | 5,873 | $ | 5,518 | ||||||
| Provision for loan losses | $ | 300 | $ | 137 | $ | 160 | $ | 158 | $ | 35 | ||||||
| Noninterest income | $ | 1,284 | $ | 1,562 | $ | 1,352 | $ | 1,386 | $ | 1,385 | ||||||
| Noninterest expense | $ | 4,766 | $ | 4,744 | $ | 4,473 | $ | 4,303 | $ | 4,453 | ||||||
| Net income (loss) | $ | 1,824 | $ | 2,283 | $ | 2,312 | $ | 2,137 | $ | 1,849 | ||||||
| Per Share Data: | ||||||||||||||||
| Net income (loss), basic | $ | 0.23 | $ | 0.28 | $ | 0.29 | $ | 0.27 | $ | 0.23 | ||||||
| Net income (loss), diluted | $ | 0.22 | $ | 0.28 | $ | 0.29 | $ | 0.26 | $ | 0.23 | ||||||
| Cash dividends declared | $ | 0.075 | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.06 | ||||||
| Book value | $ | 8.28 | $ | 7.98 | $ | 7.56 | $ | 7.40 | $ | 7.25 | ||||||
| Tangible book value | $ | 7.42 | $ | 7.10 | $ | 6.67 | $ | 6.50 | $ | 6.34 | ||||||
| Performance Ratios: | ||||||||||||||||
| Return on average assets | 1.02 | % | 1.41 | % | 1.44 | % | 1.33 | % | 1.18 | % | ||||||
| Return on average equity | 11.06 | % | 14.53 | % | 15.19 | % | 14.48 | % | 12.64 | % | ||||||
| Net interest margin, taxable equivalent | 3.95 | % | 4.01 | % | 4.12 | % | 3.93 | % | 3.78 | % | ||||||
| Average cost of funds | 0.54 | % | 0.38 | % | 0.29 | % | 0.29 | % | 0.22 | % | ||||||
| Average yield on loans | 5.70 | % | 5.61 | % | 5.87 | % | 5.68 | % | 5.44 | % | ||||||
| Efficiency ratio | 64.59 | % | 62.24 | % | 59.31 | % | 59.28 | % | 64.51 | % | ||||||
| Non-interest income to total revenue | 17.40 | % | 20.49 | % | 17.93 | % | 19.09 | % | 20.06 | % | ||||||
| Capital & Liquidity: | ||||||||||||||||
| Total equity to total assets (EOP) | 9.94 | % | 9.82 | % | 9.48 | % | 9.30 | % | 9.26 | % | ||||||
| Tangible equity to tangible assets | 9.00 | % | 8.84 | % | 8.47 | % | 8.26 | % | 8.20 | % | ||||||
| Total loans to total deposits | 71.25 | % | 73.43 | % | 68.72 | % | 65.34 | % | 64.73 | % | ||||||
| State Bank of Arizona | ||||||||||||||||
| Common equity tier 1 ratio | 13.49 | % | 13.18 | % | 13.49 | % | 13.83 | % | 13.98 | % | ||||||
| Tier 1 leverage ratio | 10.39 | % | 10.42 | % | 10.23 | % | 9.99 | % | 9.91 | % | ||||||
| Tier 1 risk based capital | 13.49 | % | 13.18 | % | 13.49 | % | 13.83 | % | 13.98 | % | ||||||
| Total risk based capital | 14.32 | % | 13.94 | % | 14.26 | % | 14.63 | % | 14.75 | % | ||||||
| Asset Quality: | ||||||||||||||||
| Gross charge-offs | $ | 88 | $ | - | $ | 77 | $ | - | $ | - | ||||||
| Net charge-offs (NCOs) | $ | (15 | ) | $ | (2 | ) | $ | 71 | $ | (82 | ) | $ | (15 | ) | ||
| NCO to average loans, annualized | -0.01 | % | 0.00 | % | 0.08 | % | -0.14 | % | -0.02 | % | ||||||
| Non-accrual loans/securities | $ | 1,302 | $ | 1,391 | $ | 657 | $ | 2,389 | $ | 5,899 | ||||||
| Other real estate owned | $ | 174 | $ | 266 | $ | 266 | $ | 399 | $ | 529 | ||||||
| Repossessed assets | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||
| Non-performing assets (NPAs) | $ | 1,476 | $ | 1,657 | $ | 923 | $ | 2,788 | $ | 6,428 | ||||||
| NPAs to total assets | 0.22 | % | 0.25 | % | 0.14 | % | 0.43 | % | 1.02 | % | ||||||
| Loans >90 days past due | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||
| NPAs + 90 days past due | $ | 1,476 | $ | 1,657 | $ | 923 | $ | 2,788 | $ | 6,428 | ||||||
| NPAs + loans 90 days past due to total assets | 0.22 | % | 0.25 | % | 0.14 | % | 0.43 | % | 1.02 | % | ||||||
| Allowance for loan losses to total loans | 0.99 | % | 0.93 | % | 0.97 | % | 0.99 | % | 0.93 | % | ||||||
| Allowance for loan losses to NPAs | 280.42 | % | 230.78 | % | 404.77 | % | 134.00 | % | 52.21 | % | ||||||
| Period End Balances: | ||||||||||||||||
| Assets | $ | 673,336 | $ | 655,337 | $ | 642,963 | $ | 641,682 | $ | 630,360 | ||||||
| Total Loans (before reserves) | $ | 417,333 | $ | 409,639 | $ | 385,489 | $ | 367,125 | $ | 361,435 | ||||||
| Deposits | $ | 585,732 | $ | 557,831 | $ | 560,952 | $ | 561,902 | $ | 558,414 | ||||||
| Stockholders' equity | $ | 66,919 | $ | 64,374 | $ | 60,975 | $ | 59,664 | $ | 58,381 | ||||||
| Common stock market capitalization | $ | 104,646 | $ | 99,208 | $ | 117,759 | $ | 126,632 | $ | 97,023 | ||||||
| Full-time equivalent employees | 122 | 124 | 121 | 122 | 117 | |||||||||||
| Shares outstanding | 8,080,791 | 8,065,709 | 8,065,709 | 8,065,709 | 8,051,677 | |||||||||||
| Average Balances: | ||||||||||||||||
| Assets | $ | 715,225 | $ | 649,673 | $ | 644,250 | $ | 640,327 | $ | 627,504 | ||||||
| Earning assets | $ | 620,445 | $ | 607,149 | $ | 603,271 | $ | 599,968 | $ | 585,574 | ||||||
| Total Loans (before reserves) | $ | 415,998 | $ | 400,116 | $ | 377,752 | $ | 369,705 | $ | 355,848 | ||||||
| Deposits | $ | 562,399 | $ | 560,343 | $ | 562,683 | $ | 562,942 | $ | 556,608 | ||||||
| Other borrowings | $ | 33,995 | $ | 17,649 | $ | 17,596 | $ | 16,622 | $ | 11,028 | ||||||
| Stockholders' equity | $ | 65,986 | $ | 62,844 | $ | 60,901 | $ | 59,034 | $ | 58,519 | ||||||
| Shares outstanding, basic - wtd | 8,075,764 | 8,065,709 | 8,065,709 | 8,062,225 | 8,049,845 | |||||||||||
| Shares outstanding, diluted - wtd | 8,108,423 | 8,092,290 | 8,092,983 | 8,093,024 | 8,087,524 | |||||||||||
| Contact: | Brian M. Riley, President & CEO |
| Craig Wenner, EVP & CFO | |
| 928 855 0000 | |
| www.statebankaz.com |