×

State Bank Financial Corporation Reports Third Quarter Financial Results

  • Third quarter 2014 net income of $11.5 million, or $.34 per diluted share
  • Continued growth in organic loans and noninterest-bearing deposits
  • Purchased loan portfolio from an FDIC-assisted transaction in July

ATLANTA, Oct. 23, 2014 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (Nasdaq:STBZ) today announced unaudited financial results for the quarter ended September 30, 2014. Net income for the third quarter of 2014 was $11.5 million, compared to $4.3 million for the third quarter of 2013 and $7.5 million for the second quarter of 2014. Fully diluted earnings per share were $.34 in the third quarter of 2014 compared to $.13 in the third quarter of 2013 and $.22 in the second quarter of 2014.

Joe Evans, Chairman and CEO, commented, "Strong organic growth in demand deposits, loans and payroll revenue reflect successful execution of our core business strategies. Furthermore, the July acquisition of a $42.6 million loan portfolio will leverage our core competency in profitably managing problem assets and help keep a healthy stream of accretion flowing through our income statement."

For clarity in this release, State Bank has previously classified loans as noncovered and covered, which primarily referred to whether or not they were subject to coverage under loss share agreements with the FDIC. These two categories will now be disclosed as organic and purchased credit impaired, respectively. In future quarters, we will add a third category, purchased non-credit impaired, which will include performing loans from Bank of Atlanta next quarter and First Bank of Georgia after the transaction closes.

Operating Highlights

Net interest income was $38.0 million in the third quarter of 2014, up from $33.1 million in the second quarter of 2014, and down from $44.4 million in the third quarter of 2013. Accretion income on loans was $21.1 million in the third quarter of 2014, up from $17.1 million in the second quarter of 2014. The linked-quarter increase in accretion income was due to gains from purchased loan pools closing out in the third quarter of 2014. Interest income on organic loans for the third quarter of 2014 was $16.2 million, up from $15.4 million in the prior quarter and $15.8 million in the third quarter of 2013. Interest expense of $1.9 million in the third quarter of 2014 was essentially flat with the prior quarter but down $124 thousand compared to the prior year period. Cost of funds for the third quarter of 2014 was 35 basis points, unchanged versus the prior quarter but down three basis points from the prior year period.

The organic loan portfolio continued to perform well in the third quarter of 2014 as past due loans declined for the second straight quarter to 10 basis points of organic loans. The provision for loan losses on organic loans was $1.0 million in the third quarter of 2014 and was primarily attributable to loan growth in the quarter. The provision on purchased credit impaired loans, net of the FDIC benefit, was a negative $584 thousand in the third quarter of 2014 due to cash flows on purchased credit impaired loans exceeding estimated cash flows.

Noninterest income, excluding amortization of the FDIC receivable for loss share agreements (which we refer to as the indemnification asset), was $3.6 million for the third quarter of 2014, up from $3.3 million in the second quarter of 2014 partially due to higher payroll fee income.

Total noninterest income for the third quarter of 2014, which includes amortization of the indemnification asset, was $3.4 million compared to $1.4 million in the second quarter of 2014 and negative $14.5 million in the third quarter of 2013. Amortization of the indemnification asset negatively impacted noninterest income by only $196 thousand in the third quarter of 2014, compared to $1.9 million in the second quarter of 2014 and $19.0 million in the third quarter of 2013.

Total noninterest expense for the third quarter of 2014 was $22.5 million, up $434 thousand from the second quarter of 2014 but down $614 thousand from the third quarter of 2013. The third quarter included approximately $223 thousand of merger expenses related to the two acquisitions announced in the second quarter of 2014.

Financial Condition

Total assets at September 30, 2014 were $2.64 billion, up from $2.58 billion at June 30, 2014 and $2.53 billion at September 30, 2013. Period-end organic loans increased to $1.29 billion at September 30, 2014, a net increase of $61.6 million, or 5.0%, from the second quarter of 2014. Period-end organic loans comprised 85.9% of total gross loans at September 30, 2014. Average organic loans increased $53.5 million in the quarter. Purchased credit impaired loans increased to $212.8 million as a result of the purchased loan portfolio from the FDIC. Total net loans were $1.48 billion at September 30, 2014, up $71.5 million from the second quarter of 2014 and $51.1 million from the third quarter of 2013.

Total deposits at September 30, 2014 were $2.16 billion, up from $2.12 billion at the end of the second quarter of 2014 and $2.05 billion at the end of the third quarter of 2013. Noninterest-bearing deposits increased $104.4 million, or 24.8%, from the third quarter of 2013. Period-end noninterest-bearing deposits represented 24.3% of total deposits as of September 30, 2014. Average noninterest-bearing deposits, which increased for the tenth consecutive quarter, were up $29.6 million from the second quarter of 2014 and $72.7 million from the third quarter of 2013.

Tangible book value per share was $13.83 at the end of the third quarter of 2014. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 17.16% and a Tier I risk-based capital ratio of 25.67%.

Recent Transactions and Subsequent Events

On June 24, 2014, State Bank announced the signing of a definitive agreement with Georgia-Carolina Bancshares, Inc. and its wholly-owned subsidiary, First Bank of Georgia, in a cash and stock transaction with a purchase price of approximately $82 million, or $22.35 per share. The transaction value at the time of the merger may change due to fluctuations in the price of State Bank Financial Corporation common stock within certain defined parameters. First Bank of Georgia is headquartered in Augusta, Georgia and operates seven banking offices in the Augusta market and mortgage origination offices in the Augusta and Savannah, Georgia markets. At June 30, 2014, First Bank of Georgia had approximately $519 million of total assets, $337 million of loans and $416 million of deposits. The agreement has been unanimously approved by the Boards of Directors of both companies and is anticipated to close in the first quarter of 2015. Completion of the transaction is subject to certain closing conditions, including customary regulatory approvals and approval by the shareholders of Georgia-Carolina Bancshares.

On July 18, 2014, State Bank and Trust Company entered into an agreement with the FDIC to purchase a $42.6 million loan portfolio of a failed bank. This portfolio is reflected in purchased credit impaired balances.

On October 1, 2014, State Bank completed its merger with Atlanta Bancorporation, Inc., that was announced on April 28, 2014. We expect the conversion of Bank of Atlanta's systems into our systems to be completed in December 2014. The consolidation of State Bank and Trust Company's current midtown Atlanta office into Bank of Atlanta's existing midtown office is scheduled to occur on December 31, 2014.

Detailed Results

Supplemental tables displaying financial results for the third quarter of 2014, the previous four quarters and year-to-date 2014 are included with this press release.

Conference Call

State Bank Chief Executive Officer Joe Evans, Chief Financial Officer Tom Callicutt and Executive Risk Officer Kim Childers will discuss financial and business results for the quarter on a conference call today at 8:30 a.m. EDT. The dial in number is 1.800.925.3017. Please allow time to register your name and affiliation/company prior to the start of the call. A replay of the conference call will be available shortly after the call's completion in the Investors section on the company's website at www.statebt.com. A slide presentation for today's call is also available in the Investors section on the company's website.

About State Bank Financial Corporation

State Bank Financial Corporation (Nasdaq:STBZ) is the holding company for State Bank and Trust Company, one of Georgia's best-capitalized banks, with approximately $2.6 billion in assets as of September 30, 2014. State Bank has locations in Metro Atlanta and Middle Georgia.

To learn more about State Bank, visit www.statebt.com

The State Bank Financial Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=14370

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "intend," "plan," "seek," "believe," "expect," "strategy," "future," "likely," "project," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements related to our expectations with respect to our future revenue expectations on our acquired loan portfolios, the expected timing of the conversion of Bank of Atlanta's systems with ours, the timing of the consolidation of our midtown Atlanta office into Bank of Atlanta's existing midtown Atlanta office and expectations with respect to our proposed merger with Georgia-Carolina Bancshares, Inc., including the expected timing, completion and other effects of the proposed transaction. Such forward-looking statements are subject to risks, uncertainties, and other factors, such as a downturn in the economy, unanticipated losses related to the integration of, and accounting for, acquired assets and assumed liabilities in our acquisition transactions, access to funding sources, greater than expected noninterest expenses, volatile credit and financial markets both domestic and foreign, potential deterioration in real estate values, regulatory changes and excessive loan losses, and, with respect to the proposed transaction with Georgia-Carolina Bancshares, Inc., the inability to obtain the requisite regulatory approvals and meet other closing terms and conditions, any or all of which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. See Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2013, for a description of some of the important factors that may affect actual outcomes.

Addition Information About the Merger and Where to Find It

In connection with the proposed merger transaction with Georgia-Carolina Bancshares, Inc., State Bank Financial Corporation has filed a registration statement on Form S-4 with the SEC to register State Bank Financial Corporation's shares that will be issued to Georgia-Carolina Bancshares, Inc.'s shareholders in connection with the transaction. The registration statement includes a proxy statement of Georgia-Carolina Bancshares, Inc. and a prospectus of State Bank Financial Corporation, as well as other relevant documents concerning the proposed transaction. The registration statement and the proxy statement/prospectus filed with the SEC related to the proposed transaction contains important information about State Bank Financial Corporation, Georgia-Carolina Bancshares, Inc. and the proposed transaction and related matters. This document is not yet final and will be amended. WE URGE SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT AND PRELIMINARY PROXY STATEMENT/PROSPECTUS (AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE INTO THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, INCLUDING THE DEFINITIVE PROXY STATEMENT/PROSPECTUS) BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION. Security holders may obtain free copies of these documents and other documents filed with the SEC on the SEC's website at http://www.sec.gov. Security holders may also obtain free copies of the documents filed with the SEC by State Bank Financial Corporation at its website at https://www.statebt.com (which website is not incorporated herein by reference) or by contacting Jeremy Lucas by telephone at 404.239.8626. Security holders may also obtain free copies of the documents filed with the SEC by Georgia-Carolina Bancshares, Inc. at its website at https://www.firstbankofga.com (which website is not incorporated herein by reference) or by contacting Thomas J. Flournoy by telephone at 706.731.6622.

State Bank Financial Corporation, Georgia-Carolina Bancshares, Inc. and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Georgia-Carolina Bancshares, Inc. in connection with the proposed merger. Information regarding these persons who may, under the rules of the SEC, be considered participants in the solicitation of shareholders in connection with the proposed merger will be included in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. Additional information regarding each of State Bank Financial Corporation's and Georgia-Carolina Bancshares, Inc.'s respective directors and executive officers, including shareholdings, is included in State Bank Financial Corporation's definitive proxy statement for 2014, which was filed with the SEC on April 11, 2014, and Georgia-Carolina Bancshares, Inc.'s definitive proxy statement for 2014, which was filed with the SEC on April 14, 2014. You can obtain free copies of this document from State Bank Financial Corporation or Georgia-Carolina Bancshares, Inc., respectively, using the contact information above.

State Bank Financial Corporation
3Q14 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
3Q14 change vs
(Dollars in thousands, except per share amounts) 3Q14 2Q14 1Q14 4Q13 3Q13 2Q14 3Q13
Income Statement Highlights
Total interest income on invested funds $ 2,545 $ 2,522 $ 2,493 $ 2,416 $ 2,587 $ 23 $ (42)
Interest income on loans, including fees 16,189 15,380 15,275 15,861 15,800 809 389
Accretion income on loans 21,110 17,087 26,536 48,065 27,978 4,023 (6,868)
Total interest expense 1,857 1,846 1,894 1,961 1,981 11 (124)
Net interest income 37,987 33,143 42,410 64,381 44,384 4,844 (6,397)
Provision for loan losses on organic loans 1,000 1,000 905 95
Provision for loan losses on purchased credit impaired loans (584) (299) 590 (98) (636) (285) 52
Amortization of FDIC receivable for loss share agreements (196) (1,949) (15,292) (31,372) (18,971) 1,753 18,775
Other noninterest income 3,597 3,318 3,103 3,955 4,471 279 (874)
Noninterest expense 22,510 22,076 23,083 22,718 23,124 434 (614)
Income before income taxes 18,462 11,735 6,548 14,344 6,491 6,727 11,971
Income tax expense 6,958 4,228 2,226 4,927 2,142 2,730 4,816
Net income $ 11,504 $ 7,507 $ 4,322 $ 9,417 $ 4,349 $ 3,997 $ 7,155
Common Share Data
Basic net income per share $ .36 $ .23 $ .13 $ .29 $ .14 $ .13 $ .22
Diluted net income per share .34 .22 .13 .28 .13 .12 .21
Cash dividends declared per share .04 .04 .03 .03 .03 .01
Book value per share 14.20 13.95 13.74 13.62 13.36 .25 .84
Tangible book value per share 13.83 13.58 13.36 13.24 12.97 .25 .86
Market price per share 16.24 16.91 17.69 18.19 15.87 (.67) .37
Average Balance Sheet Highlights
Organic loans, net of unearned income $ 1,246,008 $ 1,192,494 $ 1,133,802 $ 1,144,116 $ 1,140,052 $ 53,514 $ 105,956
Purchased credit impaired loans 215,318 236,178 250,824 258,600 305,487 (20,860) (90,169)
Assets 2,604,244 2,585,908 2,575,216 2,559,725 2,561,802 18,336 42,442
Deposits 2,125,659 2,108,595 2,088,787 2,089,202 2,077,170 17,064 48,489
Equity 448,982 444,175 439,105 429,494 427,212 4,807 21,770
Tangible common equity 437,038 432,073 426,828 417,030 414,516 4,965 22,522
Key Metrics
Return on average assets (1) 1.75% 1.16% .68% 1.46% .67% .59% 1.08%
Return on average equity (1) 10.17 6.78 3.99 8.70 4.04 3.39 6.13
Yield on earning assets (2) 6.44 5.86 7.71 11.60 8.30 .58 (1.86)
Cost of funds (2) .35 .35 .36 .37 .38 (.03)
Rate on interest-bearing liabilities .45 .45 .46 .47 .47 (.02)
Net interest margin (2) 6.14 5.55 7.38 11.26 7.95 0.59 (1.81)
Average equity to average assets 17.24 17.18 17.05 16.78 16.68 0.06 .56
Leverage ratio 17.16 16.84 16.67 16.55 16.20 0.32 .96
Tier I risk-based capital ratio 25.67 27.06 27.20 27.85 26.18 (1.39) (.51)
Efficiency ratio (2) 54.28 63.82 76.19 61.28 77.16 (9.54) (22.88)
Average loans to average deposits 68.75 67.75 66.29 67.14 69.59 1.00 (0.84)
Noninterest-bearing deposits to total deposits 24.33 21.82 22.02 22.00 20.50 2.51 3.83
Organic Assets:
Nonperforming loans to total loans .13 .16 .18 .20 .25 (.03) (.12)
Nonperforming assets to loans + ORE .16 .22 .26 .29 .33 (.06) (.17)
(1) Net income annualized for the applicable period.
(2) Interest income annualized for the applicable period and calculated on a fully tax-equivalent basis.
State Bank Financial Corporation
3Q14 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
3Q14 change vs
(Dollars in thousands) 3Q14 2Q14 1Q14 4Q13 3Q13 2Q14 3Q13
Assets
Cash and amounts due from depository institutions $ 17,209 $ 8,333 $ 7,314 $ 8,518 $ 7,888 $ 8,876 $ 9,321
Interest-bearing deposits in other financial institutions 459,271 499,400 549,593 590,231 399,267 (40,129) 60,004
Cash and cash equivalents 476,480 507,733 556,907 598,749 407,155 (31,253) 69,325
Investment securities available-for-sale 532,447 494,874 454,053 387,048 374,838 37,573 157,609
Loans receivable:
Organic loans 1,291,923 1,230,304 1,166,913 1,123,475 1,164,854 61,619 127,069
Purchased credit impaired loans (1) 212,802 211,302 246,279 257,494 290,077 1,500 (77,275)
Allowance for loan losses on organic loans (18,828) (17,885) (16,858) (16,656) (16,427) (943) (2,401)
Allowance for loan losses on purchased credit impaired loans (8,403) (17,722) (19,182) (17,409) (12,075) 9,319 3,672
Net loans 1,477,494 1,405,999 1,377,152 1,346,904 1,426,429 71,495 51,065
Mortgage loans held for sale 1,283 726 1,552 897 885 557 398
Other real estate owned (2) 15,169 23,938 38,437 47,187 52,625 (8,769) (37,456)
Premises and equipment, net 34,696 34,820 34,592 33,318 33,988 (124) 708
Goodwill 10,381 10,381 10,381 10,381 10,381
Other intangibles, net 1,511 1,663 1,824 1,986 2,150 (152) (639)
FDIC receivable for loss share agreements, net 19,999 39,250 65,248 103,160 156,549 (19,251) (136,550)
Other assets 71,915 60,896 77,232 71,075 62,101 11,019 9,814
Total assets $ 2,641,375 $ 2,580,280 $ 2,617,378 $ 2,600,705 $ 2,527,101 $ 61,095 $ 114,274
Liabilities and Shareholders' Equity
Noninterest-bearing deposits $ 524,634 $ 461,434 $ 471,414 $ 468,138 $ 420,269 $ 63,200 $ 104,365
Interest-bearing deposits 1,631,340 1,653,779 1,669,647 1,660,187 1,629,642 (22,439) 1,698
Total deposits 2,155,974 2,115,213 2,141,061 2,128,325 2,049,911 40,761 106,063
Securities sold under agreements to repurchase 1,216 1,082 (1,082)
Notes payable 2,776 2,779 4,371 5,682 5,690 (3) (2,914)
Other liabilities 24,348 13,981 30,507 28,299 41,825 10,367 (17,477)
Total liabilities 2,183,098 2,131,973 2,175,939 2,163,522 2,098,508 51,125 84,590
Total shareholders' equity 458,277 448,307 441,439 437,183 428,593 9,970 29,684
Total liabilities and shareholders' equity $ 2,641,375 $ 2,580,280 $ 2,617,378 $ 2,600,705 $ 2,527,101 $ 61,095 $ 114,274
Capital Ratios
Average equity to average assets 17.24% 17.18% 17.05% 16.78% 16.68% .06% .56%
Leverage ratio 17.16 16.84 16.67 16.55 16.20 .32 .96
Tier I risk-based capital ratio 25.67 27.06 27.20 27.85 26.18 (1.39) (.51)
Total risk-based capital ratio 26.93 28.32 28.47 29.11 27.44 (1.39) (.51)
Shares Issued and Outstanding
Common stock 32,271,466 32,130,645 32,123,645 32,094,145 32,076,645 140,821 194,821
(1) Loans covered by loss share agreements with the FDIC were approximately $163.4 million at 3Q14, $211.3 million at 2Q14, $246.3 million at 1Q14, $257.5 million at 4Q13 and $290.1 million at 3Q13.
(2) Other real estate owned covered by loss share agreements with the FDIC were approximately $11.2 million at 3Q14, $23.2 million at 2Q14, $37.5 million at 1Q14, $46.2 million at 4Q13 and $51.7 million at 3Q13.
State Bank Financial Corporation
3Q14 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
3Q14 change vs
(Dollars in thousands, except per share amounts) 3Q14 2Q14 1Q14 4Q13 3Q13 2Q14 3Q13
Net Interest Income:
Interest income on invested funds $ 2,545 $ 2,522 $ 2,493 $ 2,416 $ 2,587 $ 23 $ (42)
Interest income on loans, including fees 16,189 15,380 15,275 15,861 15,800 809 389
Accretion income on loans 21,110 17,087 26,536 48,065 27,978 4,023 (6,868)
Total interest expense 1,857 1,846 1,894 1,961 1,981 11 (124)
Net interest income 37,987 33,143 42,410 64,381 44,384 4,844 (6,397)
Provision for loan losses on organic loans 1,000 1,000 905 95
Provision for loan losses on purchased credit impaired loans (584) (299) 590 (98) (636) (285) 52
Net interest income after provision for loan losses 37,571 32,442 41,820 64,479 44,115 5,129 (6,544)
Noninterest Income:
Amortization of FDIC receivable for loss share agreements (196) (1,949) (15,292) (31,372) (18,971) 1,753 18,775
Service charges on deposits 1,206 1,196 1,158 1,304 1,353 10 (147)
Mortgage banking income 191 163 159 153 260 28 (69)
Gain on sale of investment securities 12 11 717 (12) (717)
Payroll fee income 875 822 953 879 727 53 148
ATM income 621 636 590 604 604 (15) 17
Bank-owned life insurance income 333 329 329 333 342 4 (9)
Other 371 160 (97) 682 468 211 (97)
Total noninterest income 3,401 1,369 (12,189) (27,417) (14,500) 2,032 17,901
Noninterest Expense:
Salaries and employee benefits 14,644 14,575 15,077 14,500 14,794 69 (150)
Occupancy and equipment 2,440 2,314 2,529 2,330 2,431 126 9
Legal and professional fees 1,074 996 1,014 1,154 954 78 120
Marketing 453 548 332 369 457 (95) (4)
Federal deposit insurance premiums and other regulatory fees 356 337 334 303 939 19 (583)
Loan collection and OREO costs (32) 624 733 374 32 (374)
Data processing 1,758 1,714 1,672 1,595 1,551 44 207
Amortization of intangibles 152 161 162 164 299 (9) (147)
Other 1,633 1,463 1,339 1,570 1,325 170 308
Total noninterest expense 22,510 22,076 23,083 22,718 23,124 434 (614)
Income Before Income Taxes 18,462 11,735 6,548 14,344 6,491 6,727 11,971
Income tax expense 6,958 4,228 2,226 4,927 2,142 2,730 4,816
Net Income $ 11,504 $ 7,507 $ 4,322 $ 9,417 $ 4,349 $ 3,997 $ 7,155
Net Income Per Share
Basic $ .36 $ .23 $ .13 $ .29 $ .14 $ .13 $ .22
Diluted .34 .22 .13 .28 .13 .12 .21
Weighted Average Shares Outstanding
Basic 32,206,889 32,126,260 32,094,473 32,086,781 31,998,901 80,629 207,988
Diluted 33,755,595 33,589,797 33,644,135 33,519,550 33,296,650 165,798 458,945
State Bank Financial Corporation
3Q14 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)
Nine Months Ended September 30
(Dollars in thousands, except per share amounts) 2014 2013 YTD Change
Net Interest Income:
Total interest income on invested funds $ 7,560 $ 7,782 $ (222)
Interest income on loans, including fees 46,844 45,315 1,529
Accretion income on loans 64,733 74,401 (9,668)
Total interest expense 5,597 5,972 (375)
Net interest income 113,540 121,526 (7,986)
Provision for loan losses on organic loans 2,000 1,920 80
Provision for loan losses on purchased credit impaired loans (293) (4,309) 4,016
Net interest income after provision for loan losses 111,833 123,915 (12,082)
Noninterest Income:
Amortization of FDIC receivable for loss share agreements (17,437) (56,512) 39,075
Service charges on deposits 3,560 3,852 (292)
Mortgage banking income 513 855 (342)
Gain on sale of investment securities 23 1,081 (1,058)
Payroll fee income 2,650 2,264 386
ATM income 1,847 1,844 3
Bank-owned life insurance income 991 1,021 (30)
Other 434 1,899 (1,465)
Total noninterest income (7,419) (43,696) 36,277
Noninterest Expense:
Salaries and employee benefits 44,296 47,736 (3,440)
Occupancy and equipment 7,283 7,437 (154)
Legal and professional fees 3,084 3,835 (751)
Marketing 1,333 1,135 198
Federal insurance premiums and other regulatory fees 1,027 2,012 (985)
Loan collection and OREO costs 592 3,606 (3,014)
Data processing 5,144 4,492 652
Amortization of intangibles 475 1,038 (563)
Other 4,435 3,958 477
Total noninterest expense 67,669 75,249 (7,580)
Income Before Income Taxes 36,745 4,970 31,775
Income tax expense 13,412 1,640 11,772
Net Income $ 23,333 $ 3,330 $ 20,003
Net Income Per Share
Basic $ .73 $ .10 $ .62
Diluted .69 .10 .59
Weighted Average Shares Outstanding
Basic 32,142,953 31,942,470 200,483
Diluted 33,663,588 33,215,846 447,742
State Bank Financial Corporation
3Q14 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
3Q14 change vs
(Dollars in thousands) 3Q14 2Q14 1Q14 4Q13 3Q13 2Q14 3Q13
Composition of Loans
Organic loans:
Construction, land & land development $ 324,008 $ 271,525 $ 259,488 $ 251,043 $ 285,855 $ 52,483 $ 38,153
Other commercial real estate 591,672 616,418 593,260 550,474 552,579 (24,746) 39,093
Total commercial real estate 915,680 887,943 852,748 801,517 838,434 27,737 77,246
Commercial & industrial 57,021 55,555 28,140 30,145 27,573 1,466 29,448
Owner-occupied real estate 164,514 167,129 171,221 174,858 181,882 (2,615) (17,368)
Total commercial & industrial 221,535 222,684 199,361 205,003 209,455 (1,149) 12,080
Residential real estate 80,231 75,683 67,896 66,835 63,386 4,548 16,845
Consumer 9,445 7,997 8,320 9,259 7,181 1,448 2,264
Other 65,032 35,997 38,588 40,861 46,398 29,035 18,634
Total organic loans 1,291,923 1,230,304 1,166,913 1,123,475 1,164,854 61,619 127,069
Purchased credit impaired loans:
Construction, land & land development 25,463 23,851 30,770 35,383 40,268 1,612 (14,805)
Other commercial real estate 54,573 54,212 65,599 67,573 77,040 361 (22,467)
Total commercial real estate 80,036 78,063 96,369 102,956 117,308 1,973 (37,272)
Commercial & industrial 2,785 3,070 4,216 4,271 6,378 (285) (3,593)
Owner-occupied real estate 48,834 43,409 52,791 54,436 55,723 5,425 (6,889)
Total commercial & industrial 51,619 46,479 57,007 58,707 62,101 5,140 (10,482)
Residential real estate 80,859 86,371 92,509 95,240 109,806 (5,512) (28,947)
Consumer 283 378 382 574 838 (95) (555)
Other 5 11 12 17 24 (6) (19)
Total purchased credit impaired loans 212,802 211,302 246,279 257,494 290,077 1,500 (77,275)
Total loans $ 1,504,725 $ 1,441,606 $ 1,413,192 $ 1,380,969 $ 1,454,931 $ 63,119 $ 49,794
Composition of Deposits
Noninterest-bearing demand deposits $ 524,634 $ 461,434 $ 471,414 $ 468,138 $ 420,269 $ 63,200 $ 104,365
Interest-bearing transaction accounts 377,220 387,855 382,697 367,983 304,085 (10,635) 73,135
Savings and money market deposits 910,488 898,833 903,198 892,136 908,410 11,655 2,078
Time deposits less than $100,000 147,420 155,918 162,002 168,611 177,634 (8,498) (30,214)
Time deposits $100,000 or greater 107,143 112,705 116,858 124,827 132,538 (5,562) (25,395)
Brokered and wholesale time deposits 89,069 98,468 104,892 106,630 106,975 (9,399) (17,906)
Total deposits $ 2,155,974 $ 2,115,213 $ 2,141,061 $ 2,128,325 $ 2,049,911 $ 40,761 $ 106,063
State Bank Financial Corporation
3Q14 Financial Supplement: Table 6
Condensed Consolidated Organic Asset Quality Data
Quarterly (Unaudited)
3Q14 change vs
3Q14 2Q14 1Q14 4Q13 3Q13 2Q14 3Q13
Nonperforming assets:
Nonaccrual loans $ 740 $ 1,063 $ 1,265 $ 1,396 $ 1,978 $ (323) $ (1,238)
Troubled debt restructurings 875 875 866 869 876 (1)
Total nonperforming loans 1,615 1,938 2,131 2,265 2,854 (323) (1,239)
Other real estate owned 410 729 901 965 974 (319) (564)
Total nonperforming assets 2,025 2,667 3,032 3,230 3,828 (642) (1,803)
Allowance for loan losses:
Charge-offs $ 87 $ 79 $ 136 $ 67 $ 330 $ 8 $ (243)
Recoveries 30 106 338 296 47 (76) (17)
Net charge-offs (recoveries) $ 57 $ (27) $ (202) $ (229) $ 283 $ 84 $ (226)
Ratios:
Annualized QTD charge-offs (recoveries) to total average loans .02% (.01)% (.07)% (.08)% .10% .03% (.08)%
Nonperforming loans to total loans .13 .16 .18 .20 .25 (.03) (.12)
Nonperforming assets to loans + ORE .16 .22 .26 .29 .33 (.06) (.17)
Past due loans to total loans .10 .13 .14 .09 .10 (.03)
Allowance for loan losses to loans 1.46 1.45 1.44 1.48 1.41 .01 .05
State Bank Financial Corporation
3Q14 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
3Q14 change vs
(Dollars in thousands) 3Q14 2Q14 1Q14 4Q13 3Q13 2Q14 3Q13
Selected Average Balances
Interest-bearing deposits in other financial institutions $ 476,190 $ 490,009 $ 518,362 $ 489,046 $ 398,391 $ (13,819) $ 77,799
Taxable investment securities 519,081 475,739 425,158 374,416 369,485 43,342 149,596
Nontaxable investment securities 4,407 5,501 5,538 5,559 5,836 (1,094) (1,429)
Organic loans, net of unearned income (1) 1,246,008 1,192,494 1,133,802 1,144,116 1,140,052 53,514 105,956
Purchased credit impaired loans 215,318 236,178 250,824 258,600 305,487 (20,860) (90,169)
Total earning assets 2,461,004 2,399,921 2,333,684 2,271,737 2,219,251 61,083 241,753
Total nonearning assets 143,240 185,987 241,532 287,988 342,551 (42,747) (199,311)
Total assets 2,604,244 2,585,908 2,575,216 2,559,725 2,561,802 18,336 42,442
Interest-bearing transaction accounts 376,052 376,143 357,988 338,502 320,168 (91) 55,884
Savings & money market deposits 896,503 892,168 894,994 909,999 908,275 4,335 (11,772)
Time deposits less than $100,000 151,358 159,296 165,158 173,061 181,865 (7,938) (30,507)
Time deposits $100,000 or greater 109,472 114,652 122,217 129,384 137,147 (5,180) (27,675)
Brokered and wholesale time deposits 96,743 100,395 106,555 106,676 106,918 (3,652) (10,175)
Notes payable 2,778 3,365 5,212 5,686 5,695 (587) (2,917)
Securities sold under agreements to repurchase 727 675 2,438 (2,438)
Total interest-bearing liabilities 1,632,906 1,646,019 1,652,851 1,663,983 1,662,506 (13,113) (29,600)
Noninterest-bearing deposits 495,531 465,941 441,875 431,580 422,797 29,590 72,734
Other liabilities 26,825 29,773 41,385 34,668 49,287 (2,948) (22,462)
Shareholders' equity 448,982 444,175 439,105 429,494 427,212 4,807 21,770
Total liabilities and shareholders' equity 2,604,244 2,585,908 2,575,216 2,559,725 2,561,802 18,336 42,442
Interest Margins (2)
Interest-bearing deposits in other financial institutions .26% .26% .27% .27% .31% —% (.05)%
Taxable investment securities 1.70 1.84 2.03 2.19 2.42 (.14) (.72)
Nontaxable investment securities, tax-equivalent basis (3) 1.71 2.33 2.34 2.28 2.31 (.62) (.60)
Organic loans, tax-equivalent basis (4) 5.18 5.20 5.49 5.53 5.52 (.02) (.34)
Purchased credit impaired loans 38.90 29.02 42.91 73.74 36.34 9.88 2.56
Total earning assets 6.44% 5.86% 7.71% 11.60% 8.30% .58% (1.86)%
Interest-bearing transaction accounts .13 .12 .12 .11 .11 .01 .02
Savings & money market deposits .46 .45 .44 .43 .42 .01 .04
Time deposits less than $100,000 .51 .53 .54 .55 .57 (.02) (.06)
Time deposits $100,000 or greater .63 .66 .69 .67 .71 (.03) (.08)
Brokered and wholesale time deposits 1.08 .95 .93 .93 .93 .13 .15
Notes payable 9.00 10.37 11.52 11.44 11.49 (1.37) (2.49)
Securities sold under agreements to repurchase .16 (.16)
Total interest-bearing liabilities .45 .45 .46 .47 .47 (.02)
Net interest spread 5.99 5.41 7.25 11.13 7.83 .58 (1.84)
Net interest margin 6.14% 5.55% 7.38% 11.26% 7.95% .59% (1.81)%
(1) Includes average nonaccrual loans of $1,742 for 3Q14, $1,970 for 2Q14, $2,098 for 1Q14, $2,642 for 4Q13, and $2,371 for 3Q13.
(2) Interest income annualized for the applicable period.
(3) Reflects taxable equivalent adjustments using the federal statutory tax rate of 35% in adjusting interest on tax-exempt securities to a fully taxable basis. The taxable equivalent adjustments included above amount to $6 for 3Q14, $11 for 2Q14, $11 for 1Q14, $11 for 4Q13, and $12 for 3Q13.
(4) Reflects taxable equivalent adjustments using the federal statutory tax rate of 35% in adjusting tax-exempt loan interest income to a fully taxable basis. The taxable equivalent adjustments included above amount to $75 for 3Q14, $66 for 2Q14, $65 for 1Q14, $97 for 4Q13, and $72 for 3Q13.

CONTACT: Media Contact: David Rubinger 404.502.1240 / david.rubinger@statebt.com Investor Relations Contact: Jeremy Lucas 404.239.8626 / jeremy.lucas@statebt.com

Source:State Bank Financial Corporation