State Bank Corp. Reports Third Quarter Results

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LAKE HAVASU CITY, Ariz., Oct. 25, 2013 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ) ("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income of $404,000, or $0.07 per diluted share, for the quarter ended September 30, 2013, as compared to net income of $263,000, or $0.04 per diluted share, for the same period of 2012. For the nine months ended September 30, 2013, the Company reported net income of $1.09 million, or $0.18 per diluted share, as compared to a net income of $659,000, or $0.11 per diluted share, for the same period of 2012.

Third Quarter 2013 Highlights include:

  • Highest quarterly net income since 2008.
  • Sold $2.6 million in foreclosed properties, bringing total other real estate owned to its lowest level since March of 2009.
  • The Bank's classified asset ratio fell below 100% to 93% after peaking at 225% in 2010.
  • Gross charge-offs of $65,000, the lowest quarterly level since 2007.
  • $21.1 million in new loan portfolio production.

"Our recovery continues to take hold," commented Brian M. Riley, President & CEO. "Nearly all measures of asset quality improved in the third quarter and we were able to add over $20 million in new loans. We look forward to more progress in the future."

The Company was not required to provide any additional loan loss reserves during the third quarter of 2013 as compared to $100,000 in the same period of 2012. Net credit losses during the third quarter of 2013 were $62,000 as compared to $173,000 for the same period of 2012.

Nonperforming assets were $24.3 million at September 30, 2013, a decrease of $3.3 million from $27.6 million at December 31, 2012. Nonperforming assets represented 8.48 percent of total assets at September 30, 2013 as compared to 9.99 percent at December 31, 2012. The allowance for loan and lease losses totaled $3.51 million, or 1.78 percent of total loans, at September 30, 2013.

The Company's net interest margin continues to remain strong with third quarter results of 4.16 percent. The main component to this trend continues to be the decline in costs of funds, which ended the third quarter at 33 basis points.

As of September 30, 2013, total assets were $286.6 million, an increase of $10.7 million from $275.9 million at December 31, 2012. Total loans were $196.1 million at September 30, 2013 as compared to $202.1 million at December 31, 2012. Total deposits were $251.4 million at September 30, 2013 as compared to $239.8 million at December 31, 2012.

Shareholder equity increased to $29.1 million at September 30, 2013 from $28.5 million at December 31, 2012. This was a result of net operating income. The Bank must meet certain minimum capital requirements to satisfy federal and state laws. The following table provides the Bank's capital ratio at September 30, 2013:

Actual
Ratio
Ratio to be
well
capitalized
Consent
Order
Requirement
Leverage Ratio 10.20% 5.00% 9.25%
Tier 1 Capital to Risk-Weighted Assets 13.17% 6.00% N/A
Total Capital to Risk-Weighted Assets 14.42% 10.00% 12.00%

The Company now complies with all capital requirements of its Consent Order. The Company continues to make progress in reducing its commercial real estate credit concentration and classified assets.

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 six full-service branches: two in Lake Havasu City, two in Kingman, one in Bullhead City, and one in Yuma, 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 9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Performance Highlights
Earnings:
Total revenue (Net int. income + nonint. income) $ 3,324 $ 3,496 $ 3,279 $ 3,330 $ 2,788
Net interest income $ 2,608 $ 2,681 $ 2,597 $ 2,652 $ 2,621
Provision for loan losses $ -- $ 225 $ -- $ -- $ 100
Noninterest income $ 716 $ 815 $ 682 $ 678 $ 167
Noninterest expense $ 2,920 $ 2,917 $ 2,952 $ 2,972 $ 2,425
Net income (loss) $ 404 $ 354 $ 327 $ 358 $ 263
Per Share Data:
Net income (loss), basic $ 0.07 $ 0.06 $ 0.06 $ 0.06 $ 0.04
Net income (loss), diluted $ 0.07 $ 0.06 $ 0.06 $ 0.06 $ 0.04
Cash dividends declared $ -- $ -- $ -- $ -- $ --
Book value $ 4.96 $ 4.92 $ 4.89 $ 4.85 $ 4.80
Tangible book value $ 4.96 $ 4.92 $ 4.89 $ 4.85 $ 4.80
Performance Ratios:
Return on average assets 0.56% 0.49% 0.45% 0.50% 0.36%
Return on average equity 5.57% 4.90% 4.55% 5.08% 3.77%
Net interest margin, taxable equivalent 4.16% 4.33% 4.14% 4.29% 4.05%
Average cost of funds 0.33% 0.38% 0.41% 0.43% 0.45%
Average yield on loans 5.48% 5.53% 5.28% 5.41% 5.55%
Efficiency ratio 87.85% 83.44% 90.03% 89.25% 86.98%
Non-interest income to total revenue 21.54% 23.31% 20.80% 20.36% 5.99%
Capital & Liquidity:
Total equity to total assets (EOP) 10.16% 9.93% 9.68% 10.32% 9.72%
Tangible equity to tangible assets 10.16% 9.93% 9.68% 10.32% 9.72%
Total loans to total deposits 78.31% 74.61% 76.05% 84.53% 79.27%
Mohave State Bank
Tier 1 leverage ratio 10.20% 9.89% 9.96% 10.00% 9.57%
Tier 1 risk based capital 13.17% 13.05% 12.68% 12.24% 12.17%
Total risk based capital 14.42% 14.31% 13.93% 13.50% 13.43%
Asset Quality:
Gross charge-offs $ 65 $ 315 $ 374 $ 110 $ 316
Net charge-offs (NCOs) $ 62 $ 304 $ 368 $ 8 $ 173
NCO to average loans, annualized 0.13% 0.61% 0.72% 0.02% 0.35%
Non-accrual loans $ 9,924 $ 9,297 $ 9,965 $ 10,569 $ 10,639
Other real estate owned $ 14,386 $ 16,430 $ 16,404 $ 17,012 $ 18,287
Repossessed assets $ -- $ -- $ -- $ -- $ --
Non-performing assets (NPAs) $ 24,310 $ 25,727 $ 26,369 $ 27,581 $ 28,926
NPAs to total assets 8.48% 8.86% 8.90% 9.99% 9.97%
Loans > 90 days past due $ -- $ 100 $ 27 $ -- $ 147
NPAs + 90 days past due $ 24,310 $ 25,827 $ 26,396 $ 27,581 $ 29,073
NPAs + loans 90 days past due to total assets 8.48% 8.89% 8.91% 9.99% 10.03%
Allowance for loan losses to total loans 1.78% 1.86% 1.82% 1.98% 2.04%
Allowance for loan losses to NPAs 14.44% 13.88% 13.84% 14.57% 13.92%
Period End Balances:
Assets $ 286,625 $ 290,377 $ 296,235 $ 275,955 $ 289,993
Total Loans (before reserves) $ 196,888 $ 191,601 $ 200,272 $ 202,664 $ 196,919
Deposits $ 251,426 $ 256,810 $ 263,336 $ 239,760 $ 248,428
Stockholders' equity $ 29,120 $ 28,842 $ 28,689 $ 28,478 $ 28,184
Common stock market capitalization $ 20,538 $ 20,538 $ 15,383 $ 14,528 $ 14,243
Full-time equivalent employees 80 80 80 83 81
Shares outstanding 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
Average Balances:
Assets $ 287,844 $ 291,305 $ 289,199 $ 284,658 $ 293,905
Earning assets $ 251,041 $ 254,341 $ 250,950 $ 247,056 $ 258,891
Total Loans (before reserves) $ 193,317 $ 199,577 $ 203,182 $ 203,091 $ 196,513
Deposits $ 253,239 $ 258,199 $ 247,853 $ 246,759 $ 252,687
Other borrowings $ 4,719 $ 3,426 $ 11,840 $ 8,247 $ 12,047
Stockholders' equity $ 29,008 $ 28,918 $ 28,722 $ 28,208 $ 27,925
Shares outstanding, basic - wtd 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
Shares outstanding, diluted - wtd 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
State Bank Corp.
Balance Sheets
Dollars in thousands - Unaudited 9/30/2013 12/31/2012
Consolidated Balance Sheets
Assets
Cash and cash equivalents $ 1,964 $ 2,196
Interest bearing deposits 3,987 5,192
Overnight Funds 23,200 7,400
Held for maturity securities 40 51
Available for sale securities 27,917 22,890
Total cash and securities 57,108 37,729
Loans held for sale, before reserves 2,484 3,114
Gross loans held for investment 196,086 202,181
Loan loss reserve (3,510) (4,018)
Total net loans 195,060 201,277
Premises and equipment, net 10,166 10,299
Other real estate owned 14,386 17,012
Federal Home Loan Bank and other stock 1,392 1,916
Company owned life insurance 5,673 5,554
Other assets 2,840 2,168
Total Assets $ 286,625 $ 275,955
Liabilities
Non interest bearing demand $ 51,207 $ 47,401
Money market, NOW and savings 135,185 119,028
Time deposits < $100K 29,075 31,294
Time deposits > $100K 35,959 42,037
Total Deposits 251,426 239,760
Securities sold under repurchase agreements 4,399 5,401
Federal Home Loan Bank advances -- --
Subordinated debt 675 675
Total Debt 5,074 6,076
Other Liabilities 1,005 1,641
Total Liabilities 257,505 247,477
Shareholders' Equity
Common stock 25,037 24,577
Accumulated retained earnings 4,016 3,392
Accumulated other comprehensive income 67 509
Total shareholders equity 29,120 28,478
Total liabilities and shareholders' equity $ 286,625 $ 275,955
State Bank Corp.
Statement of Operations
For the Quarter Ended Year to Date
Dollars in thousands - Unaudited 9/30/2013 9/30/2012 9/30/2013 9/30/2012
Statements of Operations
Interest income
Loans, including fees $ 2,647 $ 2,726 $ 8,089 $ 8,187
Securities 155 174 469 619
Fed funds and other 18 21 53 51
Total interest income 2,820 2,921 8,611 8,857
Interest expense
Deposits 198 284 682 912
Borrowings 14 16 43 52
Total interest expense 212 300 725 964
Net interest income 2,608 2,621 7,886 7,893
Provision for loan losses -- 100 225 470
Net interest income after loan loss provision 2,608 2,521 7,661 7,423
Noninterest income
Service charges on deposits 106 108 308 317
Mortgage loan fees 113 118 347 267
Gain on sale of loans 231 298 775 676
Gain on sale of securities -- (511) 33 (510)
Other income 266 154 751 429
Total noninterest income 716 167 2,214 1,179
Noninterest expense
Salaries and employee benefits 1,288 1,245 3,886 3,624
Net occupancy expense 109 88 281 242
Equipment expense 39 39 126 138
Data processing 278 235 830 712
Director fees & expenses 55 36 151 113
Insurance 65 67 198 202
Marketing & promotion 153 57 378 201
Professional fees 128 132 301 371
Office expense 27 41 86 121
Regulatory assessments 163 167 478 481
OREO and repossessed assets 535 228 1,801 1,493
Other expenses 80 90 274 245
Total noninterest expense 2,920 2,425 8,790 7,943
Income (loss) before provision (benefit) for income taxes 404 263 1,085 659
Provision (benefit) for income taxes -- -- -- --
Net Income (Loss) $ 404 $ 263 $ 1,085 $ 659
Per Share Data
Basic EPS $ 0.07 $ 0.04 $ 0.18 $ 0.11
Diluted EPS $ 0.07 $ 0.04 $ 0.18 $ 0.11
Average shares outstanding
Basic 5,868,038 5,868,038 5,868,038 5,865,914
Effect of dilutive shares -- -- -- 134
Diluted 5,868,038 5,868,038 5,868,038 5,866,048

CONTACT: Brian M. Riley, President & CEO Craig Wenner, EVP/Chief Financial Officer Phone: (928) 855-0000

Source:State Bank Corp.