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State Bank Corp. Reports Fourth Quarter Results

LAKE HAVASU CITY, Ariz., Jan. 27, 2015 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ) ("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income of $517,000, or $0.09 per diluted share, for the quarter ended December 31, 2014, as compared to net income of $454,000, or $0.08 per diluted share, for the same period of 2013. For the year ended ended December 31, 2014, the Company reported net income of $5.40 million, or $0.92 per diluted share, as compared to a net income of $1.54 million, or $0.26 per diluted share, for 2013.

Fourth Quarter and 2014 Highlights include:

  • The Bank reported $324,000 in gains from the sale of SBA loans in the fourth quarter. For the year, the Bank generated $757,000 in gross gains from its government guaranteed lending activity.
  • Net interest income increased by $184,000, or 6.9 percent, as the Bank added another $4.9 million in loan growth.
  • Nonperforming assets were reduced by another $2.4 million, or 14.0 percent, to $14.8 million as the Bank continued to sell other real estate owned.

"We ended 2014 with another solid quarter of progress. The Bank is starting to see loan demand for the first time in years and problem assets continue to moderate," commented Brian M. Riley, President & CEO.

The Company provided $75,000 to its loss reserves in the fourth quarter to bring the 2014 total to $695,000. Net credit losses were $313,000 in the fourth quarter and $1.36 million in 2014. This represents an increase from net credit losses of $619,000 in 2013 and principally relate to two credits. During 2014, the Company sold one nonperforming note at a discount prior to foreclosure and lowered the principal balance on another as part of an overall loan restructure.

Nonperforming assets were $14.8 million at December 31, 2014, a decrease of $8.6 million, or 36.8 percent, from $23.5 million at December 31, 2013. Nonperforming assets represented 4.67 percent of total assets at December 31, 2014 as compared to 8.15 percent at December 31, 2013. The allowance for loan and lease losses totaled $2.95 million, or 1.42 percent of total loans, at December 31, 2014. The Company continues to carefully monitor its level of loss reserves and proactively makes additions as necessary to protect against an uncertain economic environment.

The Company's net interest margin continued to remain strong with fourth quarter results at 4.0 percent. The main components to this trend are low cost of funding and a better earning asset mix. During 2014, the net interest margin averaged 4.15 percent versus 4.16 percent in 2013.

As of December 31, 2014, total assets were $317.2 million, an increase of $29.3 million, or 10.2 percent, from $287.9 million at December 31, 2013. Total loans were $209.0 million at December 31, 2014 as compared to $199.4 million at December 31, 2013. Total deposits were $277.5 million at December 31, 2014 as compared to $252.0 million at December 31, 2013.

Shareholder equity increased to $35.1 million at December 31, 2014 from $29.6 million at December 31, 2013. This resulted from core net operating income and a deferred income tax benefit. 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 December 31, 2014:

Actual
Ratio
Ratio to be
well
capitalized
Leverage Ratio
Tier 1 Capital to Risk-Weighted Assets
Total Capital to Risk-Weighted Assets
10.39%
13.70%
14.93%
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 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
Performance Highlights
Earnings:
Total revenue (Net int. income + nonint. income) $ 3,740 $ 3,668 $ 3,286 $ 3,278 $ 3,221
Net interest income $ 2,837 $ 2,793 $ 2,720 $ 2,781 $ 2,653
Provision for loan losses $ 75 $ 250 $ 250 $ 120 $ --
Noninterest income $ 903 $ 875 $ 566 $ 497 $ 568
Noninterest expense $ 3,068 $ 2,471 $ 2,478 $ 2,688 $ 2,767
Net income (loss) $ 517 $ 612 $ 3,798 $ 470 $ 454
Per Share Data:
Net income (loss), basic $ 0.09 $ 0.10 $ 0.65 $ 0.08 $ 0.08
Net income (loss), diluted $ 0.09 $ 0.10 $ 0.65 $ 0.08 $ 0.08
Cash dividends declared $ -- $ -- $ -- $ -- $ --
Book value $ 5.99 $ 5.89 $ 5.79 $ 5.12 $ 5.04
Tangible book value $ 5.99 $ 5.89 $ 5.79 $ 5.12 $ 5.04
Performance Ratios:
Return on average assets 0.65% 0.79% 5.16% 0.65% 0.64%
Return on average equity 5.91% 7.12% 48.09% 6.28% 6.18%
Net interest margin, taxable equivalent 4.00% 4.19% 4.29% 4.35% 4.24%
Average cost of funds 0.22% 0.22% 0.22% 0.24% 0.27%
Average yield on loans 5.33% 5.31% 5.18% 5.50% 5.23%
Efficiency ratio 82.03% 67.37% 75.41% 82.00% 85.90%
Non-interest income to total revenue 24.14% 23.85% 17.22% 15.16% 17.63%
Capital & Liquidity:
Total equity to total assets (EOP) 11.08% 10.88% 11.25% 10.32% 10.28%
Tangible equity to tangible assets 11.08% 10.88% 11.25% 10.32% 10.28%
Total loans to total deposits 75.01% 73.44% 77.36% 76.17% 79.45%
Mohave State Bank
Tier 1 leverage ratio 10.39% 10.34% 10.72% 10.52% 10.50%
Tier 1 risk based capital 13.70% 13.49% 13.23% 13.66% 13.33%
Total risk based capital 14.93% 14.75% 14.47% 14.91% 14.58%
Asset Quality:
Gross charge-offs $ 351 $ -- $ 1,045 $ 110 $ 50
Net charge-offs (NCOs) $ 313 $ (19) $ 1,025 $ 45 $ (115)
NCO to average loans, annualized 0.60% -0.04% 2.01% 0.09% -0.23%
Non-accrual loans $ 5,522 $ 5,975 $ 6,147 $ 8,617 $ 10,968
Other real estate owned $ 9,307 $ 11,268 $ 11,693 $ 12,196 $ 12,465
Repossessed assets $ -- $ -- $ -- $ -- $ --
Non-performing assets (NPAs) $ 14,829 $ 17,243 $ 17,840 $ 20,813 $ 23,433
NPAs to total assets 4.67% 5.43% 5.91% 7.14% 8.14%
Loans >90 days past due $ -- $ -- $ -- $ -- $ 39
NPAs + 90 days past due $ 14,829 $ 17,243 $ 17,840 $ 20,813 $ 23,472
NPAs + loans 90 days past due to total assets 4.67% 5.43% 5.91% 7.14% 8.15%
Allowance for loan losses to total loans 1.42% 1.57% 1.44% 1.90% 1.81%
Allowance for loan losses to NPAs 19.92% 18.52% 16.39% 17.77% 15.47%
Period End Balances:
Assets $ 317,215 $ 317,648 $ 301,877 $ 291,419 $ 287,857
Total Loans (before reserves) $ 208,152 $ 203,209 $ 202,897 $ 194,789 $ 200,220
Deposits $ 277,493 $ 276,716 $ 262,275 $ 255,722 $ 252,004
Stockholders' equity $ 35,137 $ 34,575 $ 33,961 $ 30,065 $ 29,584
Common stock market capitalization $ 29,340 $ 27,991 $ 30,396 $ 32,274 $ 26,113
Full-time equivalent employees 80 80 76 75 77
Shares outstanding 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
Average Balances:
Assets $ 318,835 $ 309,367 $ 294,282 $ 288,913 $ 284,506
Earning assets $ 283,657 $ 273,449 $ 260,383 $ 255,530 $ 250,250
Total Loans (before reserves) $ 207,130 $ 205,025 $ 203,858 $ 198,953 $ 202,641
Deposits $ 277,947 $ 269,083 $ 257,282 $ 252,563 $ 248,511
Other borrowings $ 4,481 $ 4,737 $ 4,547 $ 5,584 $ 5,642
Stockholders' equity $ 34,975 $ 34,365 $ 31,592 $ 29,951 $ 29,395
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 12/31/2014 12/31/2013
Consolidated Balance Sheets
Assets
Cash and cash equivalents $ 1,679 $ 1,634
Interest bearing deposits 3,459 3,360
Overnight Funds 31,740 24,395
Held for maturity securities 27 37
Available for sale securities 39,814 27,420
Total cash and securities 76,719 56,846
Loans held for sale, before reserves 1,300 2,554
Gross loans held for investment 209,012 199,444
Loan loss reserve (2,954) (3,624)
Total net loans 207,358 198,374
Premises and equipment, net 9,892 10,107
Other real estate owned 9,307 12,465
Federal Home Loan Bank and other stock 1,917 1,268
Company owned life insurance 5,871 5,709
Other assets 6,151 3,088
Total Assets $ 317,215 $ 287,857
Liabilities
Non interest bearing demand $ 62,612 $ 58,822
Money market, NOW and savings 152,308 132,082
Time deposits <$100K 25,929 27,599
Time deposits >$100K 36,644 33,501
Total Deposits 277,493 252,004
Securities sold under repurchase agreements 2,734 4,864
Federal Home Loan Bank advances -- --
Subordinated debt 675 675
Total Debt 3,409 5,539
Other Liabilities 1,176 730
Total Liabilities 282,078 258,273
Shareholders' Equity
Common stock 25,037 25,037
Accumulated retained earnings 9,866 4,470
Accumulated other comprehensive income 234 77
Total shareholders equity 35,137 29,584
Total liabilities and shareholders' equity $ 317,215 $ 287,857
State Bank Corp.
Statement of Operations
For the Quarter Ended Year to Date
Dollars in thousands - Unaudited 12/31/2014 12/31/2013 12/31/2014 12/31/2013
Statements of Operations
Interest income
Loans, including fees $ 2,759 $ 2,650 $ 10,858 $ 10,739
Securities 207 161 811 631
Fed funds and other 26 14 70 67
Total interest income 2,992 2,825 11,739 11,437
Interest expense
Deposits 141 158 552 840
Borrowings 14 14 56 58
Total interest expense 155 172 608 898
Net interest income 2,837 2,653 11,131 10,539
Provision for loan losses 75 -- 695 225
Net interest income after loan loss provision 2,762 2,653 10,436 10,314
Noninterest income
Service charges on deposits 118 107 430 415
Mortgage loan fees 150 91 432 438
Gain on sale of loans 426 166 1,260 941
Gain/(Loss) on securities -- (38) (42) (5)
Other income 209 242 761 993
Total noninterest income 903 568 2,841 2,782
Noninterest expense
Salaries and employee benefits 1,387 1,185 5,310 5,071
Net occupancy expense 94 81 377 362
Equipment expense 37 49 152 175
Data processing 281 264 1,078 1,094
Director fees & expenses 62 50 202 201
Insurance 26 29 114 227
Marketing & promotion 82 145 332 524
Professional fees 85 152 485 453
Office expense 28 27 109 113
Regulatory assessments 113 159 444 636
OREO and repossessed assets 791 547 1,579 2,348
Other expenses 82 79 524 353
Total noninterest expense 3,068 2,767 10,706 11,557
Income (loss) before provision (benefit) for income taxes 597 454 2,571 1,539
Provision (benefit) for income taxes 80 -- (2,825) --
Net Income (Loss) $ 517 $ 454 $ 5,396 $ 1,539
Per Share Data
Basic EPS $ 0.09 $ 0.08 $ 0.92 $ 0.26
Diluted EPS $ 0.09 $ 0.08 $ 0.92 $ 0.26
Average shares outstanding
Basic 5,868,038 5,868,038 5,868,038 5,868,038
Effect of dilutive shares -- -- -- --
Diluted 5,868,038 5,868,038 5,868,038 5,868,038

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

Source:State Bank Corp.