State Bank Corp Reports First Quarter Results

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LAKE HAVASU CITY, Ariz., April 25, 2014 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ) ("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income of $470,000, or $0.08 per diluted share, for the quarter ended March 31, 2014, as compared to net income of $327,000, or $0.06 per diluted share, for the same period of 2013.

First Quarter 2014 Highlights include:

  • The Bank was officially released from its regulatory Consent Order.
  • Net income increased 44 percent in the first quarter of 2014 from the same period of 2013.
  • Non-performing assets decreased by another 2.6 million to $20.8 million, lowering the Bank's classified asset ratio to 74% at March 31, 2014 from 89% at December 31, 2013.
  • Core Deposits increased by $6.8 million.

"Our financial performance has become more stable and consistent as credit conditions have improved," commented Brian M. Riley, President & CEO. "We finally reached the required metrics in 2013 that allowed banking regulators to formally release us from our stipulated Consent Order. That action is the culmination of four years of diligent and persistent work by the professionals of Mohave State Bank."

The Company provided $120,000 to its loan loss reserve during the first quarter of 2014. Net credit losses during the first quarter of 2014 were $45,000 as compared to $368,000 for the same period of 2013.

Nonperforming assets were $20.8 million at March 31, 2014, a decrease of $2.6 million from $23.4 million at December 31, 2013. Nonperforming assets represented 7.14 percent of total assets at March 31, 2014 as compared to 8.15 percent at December 31, 2013. The allowance for loan and lease losses totaled $3.7 million, or 1.90 percent of total loans, at March 31, 2014. The Company continues to carefully monitor its level of loss reserves and will proactively make additions as necessary to protect against an uncertain economic environment.

Despite a persistent low interest rate environment, the Company's net interest margin continues to remain strong with first quarter results of 4.35 percent. The increased quarterly net interest margin was the result of the collection of back interest on one problem credit and the continued decline in the cost of funding.

As of March 31, 2014, total assets were $291.4 million, an increase of $3.5 million from $287.9 million at December 31, 2013. Total loans were $194.0 million at March 31, 2014 as compared to $199.4 million at December 31, 2013. Total deposits were $255.7 million at March 31, 2014 as compared to $252.0 million at December 31, 2013.

Shareholder equity increased to $30.0 million at March 31, 2014 from $29.6 million at December 31, 2013. This was a result of net operating income. The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. The following table provides the Bank's capital ratio at March 31, 2014:

Actual
Ratio
Ratio to be
well
capitalized
Leverage Ratio
Tier 1 Capital to Risk-Weighted Assets
Total Capital to Risk-Weighted Assets
10.51%
13.66%
14.91%
5.00%
6.00%
10.00%

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 3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
Performance Highlights
Earnings:
Total revenue (Net int. income + nonint. income) $ 3,278 $ 3,221 $ 3,324 $ 3,496 $ 3,279
Net interest income $ 2,781 $ 2,653 $ 2,608 $ 2,681 $ 2,597
Provision for loan losses $ 120 $ -- $ -- $ 225 $ --
Noninterest income $ 497 $ 568 $ 716 $ 815 $ 682
Noninterest expense $ 2,688 $ 2,767 $ 2,920 $ 2,917 $ 2,952
Net income (loss) $ 470 $ 454 $ 404 $ 354 $ 327
Per Share Data:
Net income (loss), basic $ 0.08 $ 0.08 $ 0.07 $ 0.06 $ 0.06
Net income (loss), diluted $ 0.08 $ 0.08 $ 0.07 $ 0.06 $ 0.06
Cash dividends declared $ -- $ -- $ -- $ -- $ --
Book value $ 5.12 $ 5.04 $ 4.96 $ 4.92 $ 4.89
Tangible book value $ 5.12 $ 5.04 $ 4.96 $ 4.92 $ 4.89
Performance Ratios:
Return on average assets 0.65% 0.64% 0.56% 0.49% 0.45%
Return on average equity 6.28% 6.18% 5.57% 4.90% 4.55%
Net interest margin, taxable equivalent 4.35% 4.24% 4.16% 4.33% 4.14%
Average cost of funds 0.24% 0.27% 0.33% 0.38% 0.41%
Average yield on loans 5.50% 5.23% 5.68% 5.53% 5.28%
Efficiency ratio 82.00% 85.90% 87.85% 83.44% 90.03%
Non-interest income to total revenue 15.16% 17.63% 21.54% 23.31% 20.80%
Capital & Liquidity:
Total equity to total assets (EOP) 10.32% 10.28% 10.16% 9.93% 9.68%
Tangible equity to tangible assets 10.32% 10.28% 10.16% 9.93% 9.68%
Total loans to total deposits 76.17% 79.45% 78.31% 74.61% 76.05%
Mohave State Bank
Tier 1 leverage ratio 10.51% 10.50% 10.20% 9.89% 9.96%
Tier 1 risk based capital 13.66% 13.33% 13.17% 13.05% 12.68%
Total risk based capital 14.91% 14.58% 14.42% 14.31% 13.93%
Asset Quality:
Gross charge-offs $ 110 $ 50 $ 65 $ 315 $ 374
Net charge-offs (NCOs) $ 45 $ (115) $ 62 $ 304 $ 368
NCO to average loans, annualized 0.09% -0.23% 0.13% 0.61% 0.72%
Non-accrual assets $ 8,617 $ 10,968 $ 9,924 $ 9,297 $ 9,965
Other real estate owned $ 12,196 $ 12,465 $ 14,386 $ 16,430 $ 16,404
Repossessed assets $ -- $ -- $ -- $ -- $ --
Non-performing assets (NPAs) $ 20,813 $ 23,433 $ 24,310 $ 25,727 $ 26,369
NPAs to total assets 7.14% 8.14% 8.48% 8.86% 8.90%
Loans >90 days past due $ -- $ 39 $ -- $ 100 $ 27
NPAs + 90 days past due $ 20,813 $ 23,472 $ 24,310 $ 25,827 $ 26,396
NPAs + loans 90 days past due to total assets 7.14% 8.15% 8.48% 8.89% 8.91%
Allowance for loan losses to total loans 1.90% 1.81% 1.78% 1.86% 1.82%
Allowance for loan losses to NPAs 17.77% 15.47% 14.44% 13.88% 13.84%
Period End Balances:
Assets $ 291,419 $ 287,857 $ 286,625 $ 290,377 $ 296,235
Total Loans (before reserves) $ 194,789 $ 200,220 $ 196,888 $ 191,601 $ 200,272
Deposits $ 255,722 $ 252,004 $ 251,426 $ 256,810 $ 263,336
Stockholders' equity $ 30,065 $ 29,584 $ 29,120 $ 28,842 $ 28,689
Common stock market capitalization $ 32,274 $ 26,113 $ 20,538 $ 20,538 $ 15,383
Full-time equivalent employees 75 77 80 80 80
Shares outstanding 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
Average Balances:
Assets $ 288,913 $ 284,506 $ 287,844 $ 291,305 $ 289,199
Earning assets $ 255,530 $ 250,250 $ 251,041 $ 254,341 $ 250,950
Total Loans (before reserves) $ 198,953 $ 202,641 $ 193,317 $ 199,577 $ 203,182
Deposits $ 252,563 $ 248,511 $ 253,239 $ 258,199 $ 247,853
Other borrowings $ 5,584 $ 5,642 $ 4,719 $ 3,426 $ 11,840
Stockholders' equity $ 29,951 $ 29,395 $ 29,008 $ 28,918 $ 28,722
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 3/31/2014 12/31/2013
Consolidated Balance Sheets
Assets
Cash and cash equivalents $ 2,222 $ 1,634
Interest bearing deposits 4,521 3,360
Overnight Funds 22,180 24,395
Held for maturity securities 35 37
Available for sale securities 37,073 27,420
Total cash and securities 66,031 56,846
Loans held for sale, before reserves 2,773 2,554
Gross loans held for investment 194,018 199,444
Loan loss reserve (3,699) (3,624)
Total net loans 193,092 198,374
Premises and equipment, net 10,016 10,107
Other real estate owned 12,196 12,465
Federal Home Loan Bank and other stock 1,268 1,268
Company owned life insurance 5,747 5,709
Other assets 3,069 3,088
Total Assets $ 291,419 $ 287,857
Liabilities
Non interest bearing demand $ 60,453 $ 58,822
Money market, NOW and savings 137,236 132,082
Time deposits <$100K 26,735 27,599
Time deposits >$100K 31,298 33,501
Total Deposits 255,722 252,004
Securities sold under repurchase agreements 4,173 4,864
Federal Home Loan Bank advances -- --
Subordinated debt 675 675
Total Debt 4,848 5,539
Other Liabilities 784 730
Total Liabilities 261,354 258,273
Shareholders' Equity
Common stock 25,037 25,037
Accumulated retained earnings 4,940 4,470
Accumulated other comprehensive income 88 77
Total shareholders equity 30,065 29,584
Total liabilities and shareholders' equity $ 291,419 $ 287,857
State Bank Corp.
Statement of Operations
For the Quarter Ended
Dollars in thousands - Unaudited 3/31/2014 3/31/2013
Statements of Operations
Interest income
Loans, including fees $ 2,735 $ 2,684
Securities 188 160
Fed funds and other 14 16
Total interest income 2,937 2,860
Interest expense
Deposits 142 247
Borrowings 14 16
Total interest expense 156 263
Net interest income 2,781 2,597
Provision for loan losses 120 --
Net interest income after loan loss provision 2,661 2,597
Noninterest income
Service charges on deposits 103 104
Mortgage loan fees 79 110
Gain on sale of loans 168 255
(Loss)/Gain on securities (42) 33
Other income 189 180
Total noninterest income 497 682
Noninterest expense
Salaries and employee benefits 1,308 1,285
Net occupancy expense 93 93
Equipment expense 38 42
Data processing 268 273
Director fees & expenses 45 45
Insurance 30 66
Marketing & promotion 108 104
Professional fees 195 88
Office expense 27 34
Regulatory assessments 154 154
OREO and repossessed assets 291 653
Other expenses 131 115
Total noninterest expense 2,688 2,952
Income (loss) before provision (benefit) for income taxes 470 327
Provision (benefit) for income taxes -- --
Net Income $ 470 $ 327
Per Share Data
Basic EPS $ 0.08 $ 0.06
Diluted EPS $ 0.08 $ 0.06
Average shares outstanding
Basic 5,868,038 5,868,038
Effect of dilutive shares -- --
Diluted 5,868,038 5,868,038

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

Source:State Bank Corp.