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State Bank Corp. Earns $681,000, or $0.12 per Diluted Share, in First Quarter 2015; Highlighted by Strong Loan and Core Deposit Growth

LAKE HAVASU CITY, Ariz., April 30, 2015 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCQB:SBAZ) ("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income increased 44.9% to $681,000, or $0.12 per diluted share, for the first quarter ended March 31, 2015, as compared to net income of $470,000, or $0.08 per diluted share, for the first quarter of 2014.

"2015 is starting off ahead of our expectations," commented Brian M. Riley, President & CEO. "Our financial results for the quarter show strong profitability, improving asset quality trends and year-over-year loan and deposit growth. By focusing on our customers' needs and delivering the banking services that make them more productive, we look to sustain our loan and deposit growth momentum into the year."

First Quarter 2015 Highlights:

  • First quarter net income increased 44.9% to $681,000, or $0.12 per diluted share, compared to $470,000, or $0.08 per diluted share, in the first quarter a year ago.
  • Pre-tax income increased 120.0% to $1.03 million in the first quarter, compared to $470,000 in the first quarter 2014.
  • The net interest margin remained healthy at 4.09%.
  • The Bank reported $654,000 in gains from the sale of SBA and mortgage loans in the first quarter, up from $168,000 in the first quarter of 2014.
  • Loans held for investment increased 2.8% to $214.9 million during the first quarter compared to three months earlier.
  • OREO decreased to $7.5 million at March 31, 2015 on the sale of two properties.
  • Tangible book value increased 18.0% to $6.04 per share compared from $5.12 per share a year earlier.
  • Declared an annual cash dividend of $0.07 per share, which represents a dividend yield of 1.40% based on the recent stock price.

The Company's net interest margin continued to remain strong at 4.09% in the first quarter 2015 as the average cost of funds declined modestly and the earning asset mix improved.

The Company provided $110,000 to its loss reserves in the first quarter against net credit losses of $30,000. The allowance for loan losses totaled $3.0 million at March 31, 2015, or 1.41% of loans held for investment. "We continue to carefully monitor our level of loss reserves and proactively make additions as necessary to protect against an uncertain economic environment," noted Riley.

Total assets were $328.3 million at March 31, 2015, an increase of $11.1 million, or 3.4% from $317.2 million at December 31, 2014 and an increase of $36.9 million, or 12.7%, compared to $291.4 million a year ago. Total loans held for investment were $214.9 million as compared to $209.0 million at December 31, 2014 and $194.1 million at March 31, 2014. Total deposits were $287.2 million, an increase of $9.7 million, or 3.5%, from $277.5 million at December 31, 2014 and an increase of $31.5 million, or 12.3%, compared to $255.7 million a year ago. Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased 5.1% compared to three months earlier and increased 14.3% compared to a year earlier to $225.9 million at March 31, 2015. Core deposits now comprise 78.6% of total deposits.

Nonperforming assets were $14.0 million at March 31, 2015, a 5.4% decrease compared to $14.8 million at December 31, 2014 and a 32.5% decrease compared to $20.8 million at March 31, 2014. Nonperforming assets represented 4.28% of total assets at March 31, 2015, down from 4.67% at December 31, 2014 and 7.14% a year ago.

Shareholder equity increased to $35.5 million at March 31, 2015, from $35.1 million at December 31, 2014 and $30.1 million a year earlier. At March 31, 2015 tangible book value per share improved to $6.04 per share compared to $5.99 per share three months earlier and $5.12 a year earlier.

Recent Developments

On March 5th the Company declared a $0.07 per share annual cash dividend which represents the first dividend declared since 2008. Additionally State Bank Corp recently announced that it has entered into a purchase agreement to sell its Yuma branch facility to 1st Bank Yuma in a transaction valued at approximately $750,000 (deposit premium of 4.45%) plus the purchase price of the real estate and equipment. The transaction incorporates the transfer of approximately $17 million in deposits along with the sale of approximately $18 million in loans. The branch sale is expected to close during the third quarter of 2015.

Capital Management

Community banking organizations, including State Bank Corp. and Mohave State Bank, became subject to new capital requirements on January 1, 2015, and certain provisions of the new rules will be phased in from 2015 through 2019. The Company's consolidated capital ratios and the Bank's capital ratios exceeded the regulatory guidelines for a well-capitalized financial institution under the Basel III and Dodd Frank Wall Street Reform requirements at March 31, 2015. The Bank reported the following capital ratios at March 31, 2015:

Common Equity Tier 1 Capital Ratio 13.36%
Tier 1 Leverage Ratio 10.92%
Tier 1 Capital Ratio 13.36%
Total Capital Ratio 14.52%

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 3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
Performance Highlights
Earnings:
Total revenue (Net int. income + nonint. income) $ 3,965 $ 3,740 $ 3,668 $ 3,286 $ 3,278
Net interest income $ 2,864 $ 2,837 $ 2,793 $ 2,720 $ 2,781
Provision for loan losses $ 110 $ 75 $ 250 $ 250 $ 120
Noninterest income $ 1,101 $ 903 $ 875 $ 566 $ 497
Noninterest expense $ 2,821 $ 3,068 $ 2,471 $ 2,478 $ 2,688
Net income (loss) $ 681 $ 517 $ 612 $ 3,798 $ 470
Per Share Data:
Net income (loss), basic $ 0.12 $ 0.09 $ 0.10 $ 0.65 $ 0.08
Net income (loss), diluted $ 0.12 $ 0.09 $ 0.10 $ 0.65 $ 0.08
Cash dividends declared $ 0.07 $ -- $ -- $ -- $ --
Book value $ 6.04 $ 5.99 $ 5.89 $ 5.79 $ 5.12
Tangible book value $ 6.04 $ 5.99 $ 5.89 $ 5.79 $ 5.12
Performance Ratios:
Return on average assets 0.85% 0.65% 0.79% 5.16% 0.65%
Return on average equity 7.68% 5.91% 7.12% 48.09% 6.28%
Net interest margin, taxable equivalent 4.09% 4.07% 4.15% 4.18% 4.35%
Average cost of funds 0.21% 0.22% 0.22% 0.22% 0.24%
Average yield on loans 5.18% 5.33% 5.31% 5.18% 5.50%
Efficiency ratio 71.15% 82.03% 67.37% 75.41% 82.00%
Non-interest income to total revenue 27.77% 24.14% 23.85% 17.22% 15.16%
Capital & Liquidity:
Total equity to total assets (EOP) 10.80% 11.08% 10.88% 11.25% 10.32%
Tangible equity to tangible assets 10.80% 11.08% 10.88% 11.25% 10.32%
Total loans to total deposits 74.50% 75.01% 73.44% 77.36% 76.17%
Mohave State Bank
Common equity tier 1 ratio 13.36%
Tier 1 leverage ratio 10.92% 10.39% 10.34% 10.72% 10.52%
Tier 1 capital ratio 13.36% 13.70% 13.49% 13.23% 13.66%
Total capital ratio 14.52% 14.93% 14.75% 14.47% 14.91%
Asset Quality:
Gross charge-offs $ 124 $ 351 $ -- $ 1,045 $ 110
Net charge-offs (NCOs) $ 30 $ 313 $ (19) $ 1,025 $ 45
NCO to average loans, annualized 0.06% 0.60% -0.04% 2.01% 0.09%
Non-accrual assets $ 6,444 $ 5,522 $ 5,975 $ 6,147 $ 8,617
Other real estate owned $ 7,595 $ 9,307 $ 11,268 $ 11,693 $ 12,196
Repossessed assets $ -- $ -- $ -- $ -- $ --
Non-performing assets (NPAs) $ 14,039 $ 14,829 $ 17,243 $ 17,840 $ 20,813
NPAs to total assets 4.28% 4.67% 5.43% 5.91% 7.14%
Loans >90 days past due $ -- $ -- $ -- $ -- $ --
NPAs + 90 days past due $ 14,039 $ 14,829 $ 17,243 $ 17,840 $ 20,813
NPAs + loans 90 days past due to total assets 4.28% 4.67% 5.43% 5.91% 7.14%
Allowance for loan losses to total loans 1.42% 1.42% 1.57% 1.44% 1.90%
Allowance for loan losses to NPAs 21.61% 19.92% 18.52% 16.39% 17.77%
Period End Balances:
Assets $ 328,302 $ 317,215 $ 317,648 $ 301,877 $ 291,419
Total Loans (before reserves) $ 213,990 $ 208,152 $ 203,209 $ 202,897 $ 194,789
Deposits $ 287,237 $ 277,493 $ 276,716 $ 262,275 $ 255,722
Stockholders' equity $ 35,470 $ 35,137 $ 34,575 $ 33,961 $ 30,065
Common stock market capitalization $ 29,575 $ 29,340 $ 27,991 $ 30,396 $ 32,274
Full-time equivalent employees 85 80 80 76 75
Shares outstanding 5,868,038 5,868,038 5,868,038 5,868,038 5,868,038
Average Balances:
Assets $ 319,817 $ 318,835 $ 309,367 $ 294,282 $ 288,913
Earning assets $ 285,722 $ 283,657 $ 273,449 $ 260,383 $ 255,530
Total Loans (before reserves) $ 214,992 $ 207,130 $ 205,025 $ 203,858 $ 198,953
Deposits $ 279,305 $ 277,947 $ 269,083 $ 257,282 $ 252,563
Other borrowings $ 4,481 $ 4,481 $ 4,737 $ 4,547 $ 5,584
Stockholders' equity $ 35,454 $ 34,975 $ 34,365 $ 31,592 $ 29,951
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 3/31/2015 12/31/2014 3/31/2014
Consolidated Balance Sheets
Assets
Cash and cash equivalents $ 2,105 $ 1,679 $ 2,222
Interest bearing deposits 3,908 3,459 4,521
Overnight Funds 29,520 31,740 22,180
Held for maturity securities 25 27 35
Available for sale securities 48,039 39,814 37,073
Total cash and securities 83,597 76,719 66,031
Loans held for sale, before reserves 2,304 1,300 2,773
Gross loans held for investment 214,941 209,012 194,018
Loan loss reserve (3,034) (2,954) (3,699)
Total net loans 214,211 207,358 193,092
Premises and equipment, net 9,898 9,892 10,016
Other real estate owned 7,594 9,307 12,196
Federal Home Loan Bank and other stock 1,917 1,917 1,268
Company owned life insurance 5,911 5,871 5,747
Other assets 5,174 6,151 3,069
Total Assets $ 328,302 $ 317,215 $ 291,419
Liabilities
Non interest bearing demand $ 65,596 $ 62,612 $ 60,453
Money market, NOW and savings 160,306 152,308 137,236
Time deposits <$100K 27,304 25,929 26,735
Time deposits >$100K 34,031 36,644 31,298
Total Deposits 287,237 277,493 255,722
Securities sold under repurchase agreements 3,581 2,734 4,173
Federal Home Loan Bank advances -- -- --
Subordinated debt 675 675 675
Total Debt 4,256 3,409 4,848
Other Liabilities 1,339 1,176 784
Total Liabilities 292,832 282,078 261,354
Shareholders' Equity
Common stock 25,037 25,037 25,037
Accumulated retained earnings 10,136 9,866 4,940
Accumulated other comprehensive income 297 234 88
Total shareholders equity 35,470 35,137 30,065
Total liabilities and shareholders' equity $ 328,302 $ 317,215 $ 291,419
State Bank Corp.
Statement of Operations
For the Quarter Ended
Dollars in thousands - Unaudited 3/31/2015 12/31/2014 3/31/2014
Statements of Operations
Interest income
Loans, including fees $ 2,783 $ 2,759 $ 2,735
Securities 213 207 188
Fed funds and other 15 26 14
Total interest income 3,011 2,992 2,937
Interest expense
Deposits 133 141 142
Borrowings 14 14 14
Total interest expense 147 155 156
Net interest income 2,864 2,837 2,781
Provision for loan losses 110 75 120
Net interest income after loan loss provision 2,754 2,762 2,661
Noninterest income
Service charges on deposits 96 118 103
Mortgage loan fees 193 150 79
Gain on sale of loans 654 426 168
(Loss)/Gain on securities (8) -- (42)
Other income 166 209 189
Total noninterest income 1,101 903 497
Noninterest expense
Salaries and employee benefits 1,525 1,387 1,308
Net occupancy expense 80 94 93
Equipment expense 42 37 38
Data processing 288 281 268
Director fees & expenses 48 62 45
Insurance 26 26 30
Marketing & promotion 126 82 108
Professional fees 91 85 195
Office expense 35 28 27
Regulatory assessments 114 113 154
OREO and repossessed assets 286 791 291
Other expenses 160 82 131
Total noninterest expense 2,821 3,068 2,688
Income (loss) before provision (benefit) for income taxes 1,034 597 470
Provision (benefit) for income taxes 353 80 --
Net Income $ 681 $ 517 $ 470
Per Share Data
Basic EPS $ 0.12 $ 0.09 $ 0.08
Diluted EPS $ 0.12 $ 0.09 $ 0.08
Average shares outstanding
Basic 5,868,038 5,868,038 5,868,038
Effect of dilutive shares -- -- --
Diluted 5,868,038 5,868,038 5,868,038

CONTACT: Brian M. Riley, President & CEO Craig Wenner, EVP & CFO 928 855 0000 www.mohavestbank.com

Source:State Bank Corp.