State Bank Corp Exceeds Net Income of $1.5 Million in 2013

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LAKE HAVASU CITY, Ariz., Jan. 31, 2014 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ)("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income of $454,000 or $0.08 per diluted share, for the quarter ended December 31, 2013, as compared to net income of $358,000, or $0.06 per diluted share, for the same period of 2012. For the year ended December 31, 2013, the Company reported net income of $1.54 million, or $0.26 per diluted share, as compared to net income of $1.02 million, or $0.18 per diluted share, in the same period of 2012.

Highlights for the fourth quarter and year 2013 include:

  • Fourth quarter net income increased by 27% in 2013 from the same period of 2012. Year over year net income increased by 51%.
  • Nonperforming assets decreased by another $838,000 during the fourth quarter lowering the Bank's classified asset ratio to 89% at December 31, 2013 from 150% at December 31, 2012.
  • The Company experienced annual balance sheet growth for the first time in five years driven by a strong increase in core deposits.
  • The Bank's Mortgage Division established a new record of $46.4 million in loan production and recorded a net operating profit of $496,000 in 2013.

"Several factors were important keys to our success in 2013: another outstanding year in mortgage banking, lower nonperforming assets, increased SBA/USDA loan gains, and modest balance sheet growth," commented Brian M. Riley, President & CEO. "As our recovery plan unfolds, we have positioned the Company to benefit from improvement in local business conditions."

With real estate values continuing to stabilize and the credit environment improving, the Company was not required to provide any additional loan loss reserves during the fourth quarter. The Company provided $225,000 to its loan loss reserve during 2013. Net credit recoveries during the fourth quarter of 2013 were $115,000 as compared to net credit losses of $8,000 for the same period of 2012. For the year, net credit losses were $619,000, or 0.30% of beginning loans, in 2013 as compared to $1.6 million, or 0.80% of beginning loans, in 2012.

Nonperforming assets were $23.5 million at December 31, 2013, a decrease of $4.1 million from $27.6 million at December 31, 2012. Nonperforming assets represented 8.15% of total assets at December 31, 2013 as compared to 9.99% at December 31, 2012. The allowance for loan and lease losses totaled $3.62 million, or 1.81% of total loans, at December 31, 2013. The Company continues to carefully monitor its level of loss reserves and will proactively make additions as necessary.

Despite a persistent low interest rate environment, the Company's net interest margin continues to remain strong with fourth quarter 2013 results of 4.24%, down from 4.29% in the same period of 2012. The main component to this trend continues to be the decline in costs of funds, which decreased to 0.27% for the three months ended December 31, 2013. For the year, the net interest margin was 4.22% in 2013 as compared to 4.25% in 2012.

As of December 31, 2013, total assets were $287.9 million, an increase of $12.0 million from $275.9 million at December 31, 2012. Loans held for investment were $199.4 million at December 31, 2013 as compared to $202.2 million at December 31, 2012. Total deposits were $252.0 million at December 31, 2013 as compared to $239.7 million at December 31, 2012. The Bank experienced core deposit growth of $24.5 million in 2013.

Shareholder equity increased to $29.6 million at December 31, 2013 from $28.5 million at December 31, 2012. This was a result of strong 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 December 31, 2013:

Actual
Ratio
Ratio to be
well
capitalized
Consent
Order
Requirement
Leverage Ratio 10.50% 5.00% 9.25%
Tier 1 Capital to Risk-Weighted Assets 13.33% 6.00% N/A
Total Capital to Risk-Weighted Assets 14.58% 10.00% 12.00%

The Company now complies with all capital requirements of its Consent Order. The Company continues to make progress on reducing classified assets.

About the Company

State Bank Corp., headquartered in Lake Havasu City, Arizona, is the parent company of Mohave State Bank. Mohave State Bank is a full-service bank providing deposit and loan products 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 in Lake Havasu City, Kingman, Bullhead City, and Yuma, Arizona markets. 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 12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
Performance Highlights
Earnings:
Total revenue (Net int. income + nonint. income) $ 3,221 $ 3,324 $ 3,496 $ 3,279 $ 3,330
Net interest income $ 2,653 $ 2,608 $ 2,681 $ 2,597 $ 2,652
Provision for loan losses $ -- $ -- $ 225 $ -- $ --
Noninterest income $ 568 $ 716 $ 815 $ 682 $ 678
Noninterest expense $ 2,767 $ 2,920 $ 2,917 $ 2,952 $ 2,972
Net income (loss) $ 454 $ 404 $ 354 $ 327 $ 358
Per Share Data:
Net income (loss), basic $ 0.08 $ 0.07 $ 0.06 $ 0.06 $ 0.06
Net income (loss), diluted $ 0.08 $ 0.07 $ 0.06 $ 0.06 $ 0.06
Cash dividends declared $ -- $ -- $ -- $ -- $ --
Book value $ 5.04 $ 4.96 $ 4.92 $ 4.89 $ 4.85
Tangible book value $ 5.04 $ 4.96 $ 4.92 $ 4.89 $ 4.85
Performance Ratios:
Return on average assets 0.64% 0.56% 0.49% 0.45% 0.50%
Return on average equity 6.18% 5.57% 4.90% 4.55% 5.08%
Net interest margin, taxable equivalent 4.24% 4.16% 4.33% 4.14% 4.29%
Average cost of funds 0.27% 0.42% 0.38% 0.41% 0.43%
Average yield on loans 5.23% 5.68% 5.53% 5.28% 5.41%
Efficiency ratio 85.90% 87.85% 83.44% 90.03% 89.25%
Non-interest income to total revenue 17.63% 21.54% 23.31% 20.80% 20.36%
Capital & Liquidity:
Total equity to total assets (EOP) 10.28% 10.16% 9.93% 9.68% 10.32%
Tangible equity to tangible assets 10.28% 10.16% 9.93% 9.68% 10.32%
Total loans to total deposits 79.45% 78.31% 74.61% 76.05% 84.53%
Mohave State Bank
Tier 1 leverage ratio 10.50% 10.20% 9.89% 9.96% 10.00%
Tier 1 risk based capital 13.33% 13.17% 13.05% 12.68% 12.24%
Total risk based capital 14.58% 14.42% 14.31% 13.93% 13.50%
Asset Quality:
Gross charge-offs $ 50 $ 65 $ 315 $ 374 $ 110
Net charge-offs (NCOs) $ (115) $ 62 $ 304 $ 368 $ 8
NCO to average loans, annualized -0.23% 0.13% 0.61% 0.72% 0.02%
Non-accrual loans $ 10,968 $ 9,924 $ 9,297 $ 9,965 $ 10,569
Other real estate owned $ 12,465 $ 14,386 $ 16,430 $ 16,404 $ 17,012
Repossessed assets $ -- $ -- $ -- $ -- $ --
Non-performing assets (NPAs) $ 23,433 $ 24,310 $ 25,727 $ 26,369 $ 27,581
NPAs to total assets 8.14% 8.48% 8.86% 8.90% 9.99%
Loans >90 days past due $ 39 $ -- $ 100 $ 27 $ --
NPAs + 90 days past due $ 23,472 $ 24,310 $ 25,827 $ 26,396 $ 27,581
NPAs + loans 90 days past due to total assets 8.15% 8.48% 8.89% 8.91% 9.99%
Allowance for loan losses to total loans 1.81% 1.78% 1.86% 1.82% 1.98%
Allowance for loan losses to NPAs 15.47% 14.44% 13.88% 13.84% 14.57%
Period End Balances:
Assets $ 287,857 $ 286,625 $ 290,377 $ 296,235 $ 275,955
Total Loans (before reserves) $ 200,220 $ 196,888 $ 191,601 $ 200,272 $ 202,664
Deposits $ 252,004 $ 251,426 $ 256,810 $ 263,336 $ 239,760
Stockholders' equity $ 29,584 $ 29,120 $ 28,842 $ 28,689 $ 28,478
Common stock market capitalization $ 26,113 $ 20,538 $ 20,538 $ 15,383 $ 14,528
Full-time equivalent employees 77 80 80 80 83
Shares outstanding 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
Average Balances:
Assets $ 284,506 $ 287,844 $ 291,305 $ 289,199 $ 284,658
Earning assets $ 250,250 $ 251,041 $ 254,341 $ 250,950 $ 247,056
Total Loans (before reserves) $ 202,641 $ 193,317 $ 199,577 $ 203,182 $ 203,091
Deposits $ 248,511 $ 253,239 $ 258,199 $ 247,853 $ 246,759
Other borrowings $ 5,642 $ 4,719 $ 3,426 $ 11,840 $ 8,247
Stockholders' equity $ 29,395 $ 29,008 $ 28,918 $ 28,722 $ 28,208
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 12/31/2013 12/31/2012
Consolidated Balance Sheets
Assets
Cash and cash equivalents $ 1,634 $ 2,196
Interest bearing deposits 3,360 5,192
Overnight Funds 24,395 7,400
Held for maturity securities 37 51
Available for sale securities 27,420 22,890
Total cash and securities 56,846 37,729
Loans held for sale, before reserves 2,554 3,114
Gross loans held for investment 199,444 202,181
Loan loss reserve (3,624) (4,018)
Total net loans 198,374 201,277
Premises and equipment, net 10,107 10,299
Other real estate owned 12,465 17,012
Federal Home Loan Bank and other stock 1,268 1,916
Company owned life insurance 5,709 5,554
Other assets 3,088 2,168
Total Assets $ 287,857 $ 275,955
Liabilities
Non interest bearing demand $ 58,822 $ 47,401
Money market, NOW and savings 132,082 119,028
Time deposits <$100K 27,599 31,294
Time deposits >$100K 33,501 42,037
Total Deposits 252,004 239,760
Securities sold under repurchase agreements 4,864 5,401
Federal Home Loan Bank advances -- --
Subordinated debt 675 675
Total Debt 5,539 6,076
Other Liabilities 730 1,641
Total Liabilities 258,273 247,477
Shareholders' Equity
Common stock 25,037 24,577
Accumulated retained earnings 4,470 3,392
Accumulated other comprehensive income 77 509
Total shareholders equity 29,584 28,478
Total liabilities and shareholders' equity $ 287,857 $ 275,955
State Bank Corp.
Statement of Operations
For the Quarter Ended Year to Date
Dollars in thousands - Unaudited 12/31/2013 12/31/2012 12/31/2013 12/31/2012
Statements of Operations
Interest income
Loans, including fees $ 2,650 $ 2,747 $ 10,739 $ 10,934
Securities 161 164 631 784
Fed funds and other 14 13 67 64
Total interest income 2,825 2,924 11,437 11,782
Interest expense
Deposits 158 257 840 1,169
Borrowings 14 15 58 68
Total interest expense 172 272 898 1,237
Net interest income 2,653 2,652 10,539 10,545
Provision for loan losses -- -- 225 470
Net interest income after loan loss provision 2,653 2,652 10,314 10,075
Noninterest income
Service charges on deposits 107 118 415 435
Mortgage loan fees 91 118 438 386
Gain on sale of loans 166 296 941 972
Gain/(Loss) on securities (38) -- (5) (510)
Other income 242 146 993 575
Total noninterest income 568 678 2,782 1,858
Noninterest expense
Salaries and employee benefits 1,185 1,205 5,071 4,828
Net occupancy expense 81 83 362 325
Equipment expense 49 38 175 175
Data processing 264 258 1,094 970
Director fees & expenses 50 45 201 158
Insurance 29 67 227 269
Marketing & promotion 145 78 524 279
Professional fees 152 102 453 474
Office expense 27 35 113 156
Regulatory assessments 159 164 636 646
OREO and repossessed assets 547 756 2,348 2,249
Other expenses 79 141 353 387
Total noninterest expense 2,767 2,972 11,557 10,916
Income (loss) before provision (benefit) for income taxes 454 358 1,539 1,017
Provision (benefit) for income taxes -- -- -- --
Net Income (Loss) $ 454 $ 358 $ 1,539 $ 1,017
Per Share Data
Basic EPS $ 0.08 $ 0.06 $ 0.26 $ 0.18
Diluted EPS $ 0.08 $ 0.06 $ 0.26 $ 0.18
Average shares outstanding
Basic 5,868,038 5,697,351 5,868,038 5,695,807
Effect of dilutive shares -- -- -- 98
Diluted 5,868,038 5,697,351 5,868,038 5,695,905

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

Source:State Bank Corp.