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State Bank Financial Corporation Reports Second Quarter 2015 Financial Results

  • Recorded a one-time after-tax charge of $8.9 million related to early termination of loss share agreements with the FDIC, resulting in a net loss of $2.0 million during the second quarter
  • Second quarter 2015 operating income of $7.7 million, or $.20 per diluted share
  • Solid growth in noninterest income key initiatives
  • $42 million of net loan growth, including run-off from purchased loans



ATLANTA, July 23, 2015 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the quarter ended June 30, 2015. After incorporating our previously disclosed one-time pre-tax charge of $14.5 million that resulted from the early termination of our loss share agreements, net loss for the second quarter of 2015 was $2.0 million, compared to net income of $7.5 million for the second quarter of 2014 and net income of $9.2 million for the first quarter of 2015. Fully diluted loss per share was $.06 in the second quarter of 2015 compared to fully diluted earnings per share of $.22 in the second quarter of 2014 and fully diluted earnings per share of $.25 in the first quarter of 2015. On an operating basis, income for the second quarter of 2015 was $7.7 million, or $.20 per fully diluted share.

Joe Evans, Chairman and CEO, commented, "The big event of the second quarter was the early termination of our FDIC loss share agreements with a related one-time charge that led to negative earnings. I am extremely pleased to have accomplished early termination and remain highly confident that the financial benefits will allow us to recover this charge within five quarters as we previously announced. We continue to experience strong organic loan and noninterest-bearing deposit growth and reap the benefits of our focus on key noninterest income initiatives. These fundamentals produced another quarter of solid operating results with strong momentum carrying over into the second half of the year."

Operating Highlights

Net interest income of $33.5 million in the second quarter of 2015 decreased from $39.1 million in the first quarter of 2015 due to lower accretion income on loans, but increased from $33.1 million in the second quarter of 2014. Interest income on loans, excluding purchased credit impaired loans, for the second quarter of 2015 was $23.1 million, up $1.7 million from $21.4 million in the prior quarter and up $7.8 million from $15.4 million in the second quarter of 2014. Accretion income on loans was $8.4 million in the second quarter of 2015, down from $16.1 million in the first quarter of 2015 due primarily to larger gains from early loan payoffs in the previous quarter as well as a loan pool that closed out in the first quarter of 2015. Base accretion declined $1.3 million in the second quarter of 2015 compared to the prior quarter. As of June 30, 2015, approximately $104 million of accretable discount remains to be recognized as loan accretion income, compared to $110 million of accretable discount remaining at the end of the first quarter of 2015. Interest expense of $2.0 million in the second quarter of 2015 was essentially flat compared to the prior quarter. Cost of funds for the second quarter of 2015 was 29 basis points, unchanged from the first quarter of 2015 and down six basis points from the second quarter of 2014.

The organic loan portfolio continued to perform well in the second quarter of 2015 as past due organic loans represented only .08% of total organic loans. The provision for loan losses was $64 thousand in the second quarter of 2015, a decrease of $3.1 million compared to the first quarter of 2015, of which $2.3 million was related to purchased credit impaired loans.

Noninterest income, excluding (amortization)/accretion of the FDIC receivable for loss share agreements, was $9.3 million for the second quarter of 2015, compared to $10.3 million in the first quarter of 2015. The first quarter of 2015 included $380 thousand in securities gains and $2.0 million in prepayment fees. In the second quarter of 2015, we continued to experience solid growth in our noninterest income key initiatives as income from mortgage banking of $3.5 million and SBA lending of $1.4 million were up $800 thousand and $257 thousand, respectively, from the previous quarter. Payroll fee income of $956 thousand increased versus the prior year period, but was down from the previous quarter due to what is typically a seasonally strong first quarter.

On May 21, 2015, State Bank entered into an agreement with the FDIC to terminate the loss share agreements on all 12 FDIC-assisted acquisitions that occurred in 2009, 2010 and 2011, resulting in a pre-tax charge of approximately $14.5 million for the second quarter of 2015. Approximately $9.3 million of the one-time pre-tax charge was related to amortization scheduled to be recognized during future quarters, with the remainder primarily consisting of the payment made to the FDIC to eliminate all rights and obligations between State Bank and the FDIC, most significantly the elimination of the FDIC's right to share in the recovery of losses previously recognized under loss share. State Bank will now retain 100% of future recoveries instead of retaining either 5% or 20% of future recoveries as provided in the now terminated loss share agreements.

Total noninterest expense for the second quarter of 2015 was $31.4 million, a $1.3 million increase from
the first quarter of 2015, due primarily to higher merger-related expenses and salary and benefit costs largely as a result of severance related to the early termination of loss share. Merger-related expenses totaled $876 thousand in the second quarter of 2015, up from $137 thousand in the first quarter of 2015. Severance expenses totaled $443 thousand in the second quarter of 2015, compared to $365 thousand in the first quarter of 2015.

Financial Condition

Total assets at June 30, 2015 were $3.3 billion, down from $3.4 billion at March 31, 2015 but up from $2.6 billion at June 30, 2014. Period-end organic loans increased to $1.5 billion at June 30, 2015, a net increase of $90.8 million from the first quarter of 2015 and $294.0 million from the second quarter of 2014. Approximately $10.5 million of the growth in organic loans was related to loan renewals of purchased non-credit impaired loans that migrated into organic loans. Purchased non-credit impaired loans decreased $35.3 million from the first quarter of 2015 to $340.5 million, and purchased credit impaired loans decreased to $177.4 million at the end of the second quarter of 2015, a $13.5 million linked-quarter decline. Total net loans, excluding loans held for sale, were $2.0 billion at June 30, 2015, up $42.4 million from the first quarter of 2015.

Total deposits at June 30, 2015 were $2.7 billion, down from $2.8 billion at the end of the first quarter of 2015 but up from $2.1 billion at the end of the second quarter of 2014. Period-end noninterest-bearing demand deposits increased $70.2 million from the first quarter of 2015 and represented 27.9% of total deposits as of June 30, 2015. Average noninterest-bearing demand deposits increased $90.6 million from the first quarter of 2015. Average transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $105.7 million from the first quarter of 2015.

Tangible book value per share was $13.51 at the end of the second quarter of 2015. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 14.78% and a Tier I risk-based capital ratio of 18.83%.

Branch Closures

As part of our ongoing strategy to deploy personnel and resources more efficiently, State Bank consolidated three branch offices in Middle Georgia in the second quarter of 2015. After completing the First Bank of Georgia conversion, which is scheduled for the weekend of July 25-26, 2015, State Bank will operate 26 banking offices in three primary markets: Metro Atlanta (7), Middle Georgia (12), and Augusta (7), as well as five mortgage origination offices in the Atlanta, Augusta and Savannah, Georgia markets.

Detailed Results

Supplemental tables displaying financial results for the second quarter of 2015, the previous four quarters and the first half of 2015 are included with this press release.

Non-GAAP Financial Measures

This press release contains certain performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). For more information on this topic, please refer to 2Q15 Financial Supplement: Table 2, Condensed Operating Results to GAAP Earnings Reconciliation, on page 7.

Conference Call

Chief Executive Officer Joe Evans, President Tom Wiley, Chief Financial Officer Sheila Ray and Chief Credit Officer David Black will discuss financial and business results for the quarter on a conference call today at 11:00 a.m. ET.

Dial in number: 1.800.743.9807

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), with approximately $3.3 billion in assets at June 30, 2015, is an Atlanta-based bank holding company for State Bank and Trust Company and First Bank of Georgia. As of June 30, 2015, State Bank operated 19 banking offices in Metro Atlanta and Middle Georgia and one mortgage origination office in metro Atlanta. First Bank of Georgia operated seven banking offices and four mortgage origination offices in the Augusta and Savannah, Georgia MSAs.

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 on our conference call may be "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, the expected future financial benefits of our early termination of loss share coverage and our operating momentum carrying into the second half of 2015. 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 acquisitions, 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, 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 most recently ended fiscal year, for a description of some of the important factors that may affect actual outcomes.

State Bank Financial Corporation
2Q15 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
2Q15 change vs
(Dollars in thousands, except per share amounts; taxable equivalent) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Income Statement Highlights
Interest income on loans $23,174 $21,498 $17,496 $16,237 $15,416 1,676 7,758
Accretion income on loans 8,365 16,069 14,124 21,110 17,087 (7,704) (8,722)
Interest income on invested funds 4,037 3,629 2,932 2,552 2,533 408 1,504
Total interest income 35,576 41,196 34,552 39,899 35,036 (5,620) 540
Interest expense 1,972 1,979 1,923 1,857 1,846 (7) 126
Net interest income 33,604 39,217 32,629 38,042 33,190 (5,613) 414
Provision for loan losses 64 3,193 1,189 416 701 (3,129) (637)
(Amortization) accretion of FDIC receivable for loss share agreements (2) (492) (1,448) 1,652 (196) (1,949) 956 1,457
Noninterest income 9,328 10,257 5,285 3,624 3,348 (929) 5,980
Total operating noninterest income (2) 8,836 8,809 6,937 3,428 1,399 27 7,437
Operating noninterest expense (3) 30,047 29,592 23,999 22,207 21,794 455 8,253
Operating income before taxes (2)(3) 12,329 15,241 14,378 18,847 12,094 (2,912) 235
Operating income tax expense (2)(3) 4,618 5,729 5,689 7,157 4,415 (1,111) 203
Operating income (2)(3) 7,711 9,512 8,689 11,690 7,679 (1,801) 32
Loss share expense termination, net of tax benefit (8,923) (8,923) (8,923)
Severance costs, net of tax benefit (272) (224) (916) (49) (10) (48) (262)
Merger-related expenses, net of tax benefit (537) (84) (188) (137) (162) (453) (84)
Net income (loss) available to common shareholders $(2,021) $9,204 $7,585 $11,504 $7,507 $(11,225) $(9,528)
Common Share Data
Basic net income (loss) per share $(.06) $.27 $.24 $.36 $.23 $(.33) $(.29)
Diluted net income (loss) per share (4) (.06) .25 .22 .34 .22 (.31) (.28)
Cash dividends declared per share .06 .05 .04 .04 .04 .01 .02
Book value per share 14.62 14.81 14.38 14.20 13.95 (.19) .67
Tangible book value per share 13.51 13.70 13.97 13.83 13.58 (.19) (.07)
Market price per share (quarter end) 21.70 21.00 19.98 16.24 16.91 .70 4.79
Common Shares Outstanding
Common stock 35,763,791 35,738,850 32,269,604 32,271,466 32,130,645 24,941 3,633,146
Weighted average shares outstanding:
Basic 35,741,761 34,373,665 32,271,537 32,206,889 32,126,260 1,368,096 3,615,501
Diluted (4) 35,741,761 36,437,322 33,935,366 33,755,595 33,589,797 (695,561) 2,151,964
Average Balance Sheet Highlights
Loans, excluding purchased credit impaired $1,920,219 $1,791,537 $1,430,495 $1,246,008 $1,192,494 $128,682 $727,725
Purchased credit impaired loans 179,579 194,471 214,518 215,318 236,178 (14,892) (56,599)
Assets 3,316,424 3,323,713 2,858,209 2,609,776 2,591,025 (7,289) 725,399
Deposits 2,746,818 2,716,084 2,339,566 2,125,659 2,108,595 30,734 638,223
Liabilities 44,347 82,361 57,506 35,135 38,255 (38,014) 6,092
Equity 525,259 525,268 461,137 448,982 444,175 (9) 81,084
Tangible common equity 485,337 485,087 447,641 437,038 432,073 250 53,264

State Bank Financial Corporation
2Q15 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
2Q15 change vs
(Dollars in thousands, except per share amounts; taxable equivalent) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Key Metrics
Operating return on average assets (1)(2)(3) .93% 1.16% 1.21% 1.78% 1.19% (.23) (.26)
Operating return on average equity (1)(2)(3) 5.89 7.34 7.48 10.33 6.93 (1.45) (1.04)
Return on average assets (1) (.24) 1.12 1.05 1.75 1.16 (1.36) (1.40)
Return on average equity (1) (1.54) 7.11 6.53 10.17 6.78 (8.65) (8.32)
Yield on earning assets (1) 4.58 5.37 5.08 6.44 5.86 (.79) (1.28)
Cost of funds .29 .29 .33 .35 .35 (.06)
Rate on interest-bearing liabilities .39 .38 .43 .45 .45 .01 (.06)
Net interest margin (1) 4.33 5.11 4.80 6.14 5.55 (.78) (1.22)
Average equity to average assets 15.84 15.80 16.13 17.20 17.14 .04 (1.30)
Leverage ratio 14.78 15.00 15.90 17.16 16.84 (.22) (2.06)
Tier I risk-based capital ratio 18.83 19.51 23.12 25.17 27.06 (.68) (8.23)
Total risk-based capital ratio 19.98 20.70 24.37 26.42 28.32 (.72) (8.34)
Efficiency ratio (1) 112.46 62.66 65.20 54.28 63.82 49.80 48.64
Average loans to average deposits 76.44 73.12 70.31 68.75 67.75 3.32 8.69
Noninterest-bearing deposits to total deposits 27.85 24.91 24.14 24.33 21.82 2.94 6.03


(1) Income annualized for the applicable period.
(2) Excludes the one-time loss share expense termination charge of $14.6 million, net of income tax benefit of $5.6 million, in the second quarter of 2015
(3) Excludes severance costs and merger-related expenses.
(4) Since the Company had a net loss for the three month period ended June 30, 2015, all potential common shares were excluded from the calculation of diluted earnings per share as they would have had an anti-dilutive effect for the period.

State Bank Financial Corporation
2Q15 Financial Supplement: Table 2
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
2Q15 change vs
(dollars in thousands, except per share amounts; taxable equivalent)2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Interest income reconciliation
Interest income - taxable equivalent$35,576 $41,196 $34,552 $39,899 35,036 (5,620) 540
Taxable equivalent adjustment(109) (125) (84) (82) (77) 16 (32)
Interest income (GAAP)$35,467 $41,071 $34,468 $39,817 $34,959 $(5,604) $508
Net interest income reconciliation
Net interest income - taxable equivalent$33,604 $39,217 $32,629 $38,042 33,190 (5,613) 414
Taxable equivalent adjustment(109) (125) (84) (82) (77) 16 (32)
Net interest income (GAAP)$33,495 $39,092 $32,545 $37,960 $33,113 $(5,597) $382
(Amortization) accretion of FDIC receivable for loss share agreements
(Amortization) accretion of FDIC receivable for loss share agreements$(492) $(1,448) $1,652 $(196) $(1,949) $956 $1,457
Loss share termination(14,548) (14,548) (14,548)
(Amortization) accretion of FDIC receivable for loss share agreements (GAAP)$(15,040) $(1,448) $1,652 $(196) $(1,949) $(13,592) $(13,091)
Total operating noninterest income reconciliation
Operating noninterest income$8,836 $8,809 $6,937 $3,428 $1,399 $27 $7,437
Loss share termination(14,548) (14,548) (14,548)
Total noninterest income (GAAP)$(5,712) $8,809 $6,937 $3,428 $1,399 $(14,521) $(7,111)
Operating noninterest expense reconciliation
Operating expense$30,047 $29,592 $23,999 $22,207 $21,794 $455 $8,253
Merger-related expenses876 137 306 223 265 739 611
Severance costs443 365 1,494 80 17 78 426
Total noninterest expense (GAAP)$31,366 $30,094 $25,799 $22,510 $22,076 $1,272 $9,290
Operating income before taxes reconciliation
Operating income before taxes$12,329 $15,241 $14,378 $18,847 $12,094 $(2,912) $235
Loss share termination(14,548) (14,548) (14,548)
Merger-related expenses(876) (137) (306) (223) (265) (739) (611)
Severance costs(443) (365) (1,494) (80) (17) (78) (426)
Taxable equivalent adjustment(109) (125) (84) (82) (77) 16 (32)
Income (loss) before taxes (GAAP)$(3,647) $14,614 12,494 18,462 $11,735 $(18,261) $(15,382)
State Bank Financial Corporation
2Q15 Financial Supplement: Table 2 (continued)
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
2Q15 change vs
(dollars in thousands, except per share amounts; taxable equivalent)2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Income tax expense reconciliation
Operating income tax expense$4,618 5,729 5,689 7,157 4,415 (1,111) 203
Loss share termination(5,625) (5,625) (5,625)
Merger-related expenses(339) (53) (118) (86) (103) (286) (236)
Severance costs(171) (141) (578) (31) (7) (30) (164)
Taxable equivalent adjustment(109) (125) (84) (82) (77) 16 (32)
Income tax expense (GAAP)$(1,626) $5,410 $4,909 $6,958 $4,228 $(7,036) $(5,854)
Book value per common share reconciliation
Tangible book value per common share$13.51 $13.70 $13.97 $13.83 $13.58 $(.19) $(.07)
Effect of goodwill and other intangibles1.11 1.11 .41 .37 .37 .74
Book value per common share (GAAP)$14.62 $14.81 $14.38 $14.20 $13.95 $(.19) $.67

(1) Management evaluates the capital position and operating performance of State Bank Financial Corporation (the “Company”) by using certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), including: interest income - taxable equivalent, net interest income - taxable equivalent, (amortization) accretion of FDIC receivable for loss share agreements, operating income before taxes - taxable equivalent, income tax expense, and tangible book value per common share. The Company has included these non-GAAP financial measures in this press release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures (a) provides important supplemental information that contributes to a proper understanding of the Company’s operating performance, (b) enables a more complete understanding of factors and trends affecting the Company’s business, and (c) allows investors to evaluate the Company’s performance in a manner similar to management, the financial services industry, bank stock analysts, and bank regulators. Management uses non-GAAP measures as follows: preparation of the Company’s operating budgets, monthly financial performance reporting, and presentation to investors of Company performance.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the accompanying table. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this press release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this press release with other companies’ non-GAAP financial measures having the same or similar names.

State Bank Financial Corporation
2Q15 Financial Supplement: Table 3
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
2Q15 change vs
(Dollars in thousands) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Assets
Cash and amounts due from depository institutions $21,903 $20,426 $10,550 $17,209 $8,333 $1,477 $13,570
Interest-bearing deposits in other financial institutions 179,831 285,971 470,608 459,271 499,400 (106,140) (319,569)
Cash and cash equivalents 201,734 306,397 481,158 476,480 507,733 (104,663) (305,999)
Investment securities available-for-sale 815,277 819,609 640,086 532,447 494,874 (4,332) 320,403
Loans 2,042,186 2,000,189 1,634,529 1,504,725 1,441,606 41,997 600,580
Allowance for loan and lease losses (1) (29,569) (29,982) (28,638) (27,231) (35,607) 413 6,038
Loans, net 2,012,617 1,970,207 1,605,891 1,477,494 1,405,999 42,410 606,618
Loans held-for-sale 64,047 45,211 3,174 1,283 726 18,836 63,321
Other real estate owned 15,055 16,848 8,568 15,169 23,938 (1,793) (8,883)
Premises and equipment, net 45,608 46,370 35,286 34,696 34,820 (762) 10,788
Goodwill 31,049 30,510 10,606 10,381 10,381 539 20,668
Other intangibles, net 8,922 9,045 2,752 1,511 1,663 (123) 7,259
SBA servicing rights 2,185 1,902 1,516 283 2,185
FDIC receivable for loss share agreements 17,098 22,320 26,221 44,775 (17,098) (44,775)
Bank-owned life insurance 57,810 57,348 41,479 41,136 40,803 462 17,007
Other assets 46,004 31,363 29,374 30,779 20,093 14,641 25,911
Total assets $3,300,308 $3,351,908 $2,882,210 $2,647,597 $2,585,805 $(51,600) $714,503
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits $762,100 $691,938 $577,295 $524,634 $461,434 $70,162 $300,666
Interest-bearing deposits 1,974,185 2,085,997 1,814,387 1,631,340 1,653,779 (111,812) 320,406
Total deposits 2,736,285 2,777,935 2,391,682 2,155,974 2,115,213 (41,650) 621,072
Securities sold under agreements to repurchase 11,747 8,250 3,497 11,747
Notes payable 2,765 2,769 2,771 2,776 2,779 (4) (14)
Other liabilities 26,527 33,708 23,662 30,570 19,506 (7,181) 7,021
Total liabilities 2,777,324 2,822,662 2,418,115 2,189,320 2,137,498 (45,338) 639,826
Total shareholders’ equity 522,984 529,246 464,095 458,277 448,307 (6,262) 74,677
Total liabilities and shareholders’ equity $3,300,308 $3,351,908 $2,882,210 $2,647,597 $2,585,805 $(51,600) $714,503
Capital Ratios (2)
Average equity to average assets 15.84% 15.80% 16.13% 17.20% 17.14% .04% (1.30)%
Leverage ratio 14.78 15.00 15.90 17.16 16.84 (.22) (2.06)
CET1 risk-based capital ratio 18.83 19.51 N/A N/A N/A (.68) N/A
Tier I risk-based capital ratio 18.83 19.51 23.12 25.17 27.06 (.68) (8.23)
Total risk-based capital ratio 19.98 20.70 24.37 26.42 28.32 (.72) (8.34)

(1) Allowance for loan losses on purchased credit impaired loans was approximately $9.9 million at 2Q15, $10.6 million at 1Q15, $10.2 million at 4Q14, $8.4 million at 3Q14 and $17.7 million at 2Q14.
(2) Beginning January 1, 2015, the Company's ratios are calculated using the Basel III framework. Capital ratios for prior periods were calculated using the Basel I framework. The Common Equity Tier 1 (CET1) capital ratio is a new ratio introduced under the Basel III framework.

State Bank Financial Corporation
2Q15 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Quarterly (Unaudited)
2Q15 change vs
(Dollars in thousands, except per share amounts) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Net Interest Income:
Interest income on loans $23,070 $21,400 $17,416 $16,162 $15,350 $1,670 $7,720
Accretion income on loans 8,365 16,069 14,124 21,110 17,087 (7,704) (8,722)
Interest income on invested funds 4,032 3,602 2,928 2,545 2,522 430 1,510
Interest expense 1,972 1,979 1,923 1,857 1,846 (7) 126
Net interest income 33,495 39,092 32,545 37,960 33,113 (5,597) 382
Provision for loan losses 64 3,193 1,189 416 701 (3,129) (637)
Net interest income after provision for loan losses 33,431 35,899 31,356 37,544 32,412 (2,468) 1,019
Noninterest Income:
(Amortization) accretion of FDIC receivable for loss share agreements (15,040) (1,448) 1,652 (196) (1,949) (13,592) (13,091)
Service charges on deposits 1,501 1,489 1,274 1,206 1,196 12 305
Mortgage banking income 3,480 2,680 322 191 163 800 3,317
Payroll fee income 956 1,158 1,050 875 822 (202) 134
SBA income 1,380 1,123 477 257 1,380
ATM income 773 725 624 621 636 48 137
Bank-owned life insurance income 462 455 343 333 329 7 133
Gain (loss) on sale of investment securities (59) 380 223 12 (439) (71)
Other 835 2,247 972 398 190 (1,412) 645
Total noninterest income (5,712) 8,809 6,937 3,428 1,399 (14,521) (7,111)
Noninterest Expense:
Salaries and employee benefits 20,506 19,582 17,797 14,644 14,575 924 5,931
Occupancy and equipment 3,219 3,105 2,615 2,440 2,314 114 905
Data processing 2,435 2,280 1,909 1,758 1,714 155 721
Legal and professional fees 1,284 1,484 844 851 731 (200) 553
Merger-related expenses 876 137 306 223 265 739 611
Marketing 599 436 491 453 548 163 51
Federal deposit insurance premiums and other regulatory fees 455 506 393 356 337 (51) 118
Loan collection and OREO costs (114) 405 (112) (32) (519) (82)
Amortization of intangibles 442 417 257 152 161 25 281
Other 1,664 1,742 1,299 1,633 1,463 (78) 201
Total noninterest expense 31,366 30,094 25,799 22,510 22,076 1,272 9,290
Income (Loss) Before Income Taxes (3,647) 14,614 12,494 18,462 11,735 (18,261) (15,382)
Income tax expense (benefit) (1,626) 5,410 4,909 6,958 4,228 (7,036) (5,854)
Net Income (Loss) $(2,021) $9,204 $7,585 $11,504 $7,507 $(11,225) $(9,528)
Net Income (Loss) Per Share
Basic $(.06) $.27 $.24 $.36 $.23 $(.33) $(.29)
Diluted (.06) .25 .22 .34 .22 (.31) (.28)
Weighted Average Shares Outstanding
Basic 35,741,761 34,373,665 32,271,537 32,206,889 32,126,260 1,368,096 3,615,501
Diluted 35,741,761 36,437,322 33,935,366 33,755,595 33,589,797 (695,561) 2,151,964

State Bank Financial Corporation
2Q15 Financial Supplement: Table 5
Condensed Consolidated Income Statements
Year to Date (Unaudited)
Six Months Ended June 30 YTD Change
(Dollars in thousands, except per share amounts) 2015 2014
Net Interest Income:
Interest income on loans $44,470 $30,598 $13,872
Accretion income on loans 24,434 43,623 (19,189)
Interest income on invested funds 7,634 5,015 2,619
Interest expense 3,951 3,740 211
Net interest income 72,587 75,496 (2,909)
Provision for loan losses 3,257 1,291 1,966
Net interest income after provision for loan losses 69,330 74,205 (4,875)
Noninterest Income:
Amortization of FDIC receivable for loss share agreements (16,488) (17,241) 753
Service charges on deposits 2,990 2,354 636
Mortgage banking income 6,160 322 5,838
Payroll fee income 2,114 1,775 339
SBA income 2,503 2,503
ATM income 1,498 1,226 272
Bank-owned life insurance income 917 658 259
Gain on sale of investment securities 321 23 298
Other 3,082 120 2,962
Total noninterest income 3,097 (10,763) 13,860
Noninterest Expense:
Salaries and employee benefits 40,088 29,652 10,436
Occupancy and equipment 6,324 4,843 1,481
Data processing 4,715 3,386 1,329
Legal and professional fees 2,768 1,745 1,023
Merger-related expenses 1,013 265 748
Marketing 1,035 880 155
Federal deposit insurance premiums and other regulatory fees 961 671 290
Loan collection and OREO costs 291 592 (301)
Amortization of intangibles 859 323 536
Other 3,406 2,802 604
Total noninterest expense 61,460 45,159 16,301
Income Before Income Taxes 10,967 18,283 (7,316)
Income tax expense 3,784 6,454 (2,670)
Net Income $7,183 $11,829 $(4,646)
Net Income Per Share
Basic $.20 $.37 $(.17)
Diluted .19 .35 (.16)
Weighted Average Shares Outstanding
Basic 35,061,492 32,110,454 2,951,038
Diluted 37,300,987 33,617,054 3,683,933

State Bank Financial Corporation
2Q15 Financial Supplement: Table 6
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
2Q15 change vs
(Dollars in thousands) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Composition of Loans
Organic loans (1):
Construction, land & land development $399,982 $388,148 $310,987 $324,008 $271,525 $11,834 $128,457
Other commercial real estate 634,943 606,347 609,478 591,672 616,418 28,596 18,525
Total commercial real estate 1,034,925 994,495 920,465 915,680 887,943 40,430 146,982
Residential real estate 118,612 107,554 91,448 80,231 75,683 11,058 42,929
Owner-occupied real estate 205,805 191,557 188,933 164,514 167,129 14,248 38,676
Commercial, financial & agricultural 126,157 108,929 90,930 102,417 91,552 17,228 34,605
Leases 26,709 21,491 19,959 19,636 5,218 26,709
Consumer 12,078 9,442 8,658 9,445 7,997 2,636 4,081
Total organic loans 1,524,286 1,433,468 1,320,393 1,291,923 1,230,304 90,818 293,982
Purchased non-credit impaired loans(2):
Construction, land & land development 61,089 67,129 2,166 (6,040) 61,089
Other commercial real estate 91,212 94,917 26,793 (3,705) 91,212
Total commercial real estate 152,301 162,046 28,959 (9,745) 152,301
Residential real estate 82,668 88,871 43,669 (6,203) 82,668
Owner-occupied real estate 73,409 77,946 22,743 (4,537) 73,409
Commercial, financial & agricultural 28,656 42,494 11,635 (13,838) 28,656
Consumer 3,505 4,517 791 (1,012) 3,505
Total purchased non-credit impaired loans 340,539 375,874 107,797 (35,335) 340,539
Purchased credit impaired loans (3):
Construction, land & land development 20,002 18,791 24,544 25,463 23,851 1,211 (3,849)
Other commercial real estate 48,187 54,211 58,680 54,573 54,212 (6,024) (6,025)
Total commercial real estate 68,189 73,002 83,224 80,036 78,063 (4,813) (9,874)
Residential real estate 70,537 74,876 78,793 80,859 86,371 (4,339) (15,834)
Owner-occupied real estate 35,036 39,210 42,168 48,834 43,409 (4,174) (8,373)
Commercial, financial & agricultural 3,234 3,427 1,953 2,790 3,081 (193) 153
Consumer 365 332 201 283 378 33 (13)
Total purchased credit impaired loans 177,361 190,847 206,339 212,802 211,302 (13,486) (33,941)
Total loans $2,042,186 $2,000,189 $1,634,529 $1,504,725 $1,441,606 $41,997 $600,580
Composition of Deposits
Noninterest-bearing demand deposits $762,100 $691,938 $577,295 $524,634 $461,434 $70,162 $300,666
Interest-bearing transaction accounts 497,715 562,378 495,966 377,220 387,855 (64,663) 109,860
Savings and money market deposits 1,038,292 1,052,677 954,626 910,488 898,833 (14,385) 139,459
Time deposits less than $250,000 301,375 319,043 247,757 234,145 247,648 (17,668) 53,727
Time deposits $250,000 or greater 59,161 58,151 18,946 20,418 20,975 1,010 38,186
Brokered and wholesale time deposits 77,642 93,748 97,092 89,069 98,468 (16,106) (20,826)
Total deposits $2,736,285 $2,777,935 $2,391,682 $2,155,974 $2,115,213 $(41,650) $621,072


(1) Loans originated by State Bank and Trust Company ("State Bank") and First Bank of Georgia ("First Bank").
(2) Consists of loans purchased through the Bank of Atlanta and First Bank acquisitions.
(3) Acquired loans, which at acquisition, management determined it was probable that we would be unable to collect all contractual principal and interest payments due.

State Bank Financial Corporation
2Q15 Financial Supplement: Table 7
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
2Q15 change vs
(Dollars in thousands) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Allowance for loan and lease losses on organic loans
Beginning Balance $19,424 $18,392 $18,828 $17,885 $16,858 $1,032 $2,566
Charge-offs (64) (76) (1,250) (87) (79) 12 15
Recoveries 39 38 39 30 106 1 (67)
Net (charge-offs) recoveries (25) (38) (1,211) (57) 27 13 (52)
Provision for loan losses 222 1,070 775 1,000 1,000 (848) (778)
Ending Balance $19,621 $19,424 $18,392 $18,828 $17,885 $197 $1,736
Allowance for loan and lease losses on purchased loans (1) (2)
Beginning Balance $10,558 $10,246 $8,403 $17,722 $19,182 $312 $(8,624)
Charge-offs (2,201) (3,231) (898) (5,329) (4,881) 1,030 2,680
Recoveries 1,200 924 2,410 2,417 3,326 276 (2,126)
Net (charge-offs) recoveries (1,001) (2,307) 1,512 (2,912) (1,555) 1,306 554
Provision for loan losses 391 2,619 331 (6,407) 95 (2,228) 296
Ending Balance $9,948 $10,558 $10,246 $8,403 $17,722 $(610) $(7,774)
Nonperforming organic assets
Nonaccrual loans $1,317 $1,428 $1,245 $740 $1,063 $(111) $254
Troubled debt restructurings 3,317 3,374 4,301 875 875 (57) 2,442
Total nonperforming organic loans 4,634 4,802 5,546 1,615 1,938 (168) 2,696
Other real estate owned 160 74 410 729 160 (569)
Total nonperforming organic assets $4,794 $4,802 $5,620 $2,025 $2,667 $(8) $2,127
Ratios for organic assets
Annualized QTD charge-offs (recoveries) to average organic loans .01% .01% .36% .02% (.01)% % .02%
Nonperforming loans to organic loans .30 .33 .42 .13 .16 (.03) .14
Nonperforming assets to organic loans + OREO .31 .33 .43 .16 .22 (.02) .09
Past due loans to organic loans .08 .11 .17 .10 .13 (.03) (.05)
Allowance for loan and lease losses to organic loans 1.29 1.36 1.39 1.46 1.45 (.07) (.16)
Ratios for purchased non-credit impaired loans
Annualized QTD charge-offs (recoveries) to average PNCI loans .04% % % N/A N/A .04% N/A
Nonperforming loans to PNCI loans .03 .04 .10 N/A N/A (.01) N/A
Past due loans to PNCI loans .49 .36 .46 N/A N/A .13 N/A
Ratios for purchased credit impaired loans (3)
Annualized QTD charge-offs (recoveries) to average PCI loans 4.81% 6.73% 1.66% 9.82% 8.29% (1.92)% (3.48)%
Past due loans to PCI loans 13.31 18.48 15.62 15.14 11.03 (5.17) 2.28
Allowance for loan and lease losses to PCI loans 5.61 5.53 4.97 3.95 8.39 .08 (2.78)


(1) Includes purchased non-credit impaired loan charge-offs and corresponding provision for loan losses of $46,000 for 2Q15 and $2,000 for 1Q15, respectively, resulting in no ending allowance for purchased non-credit impaired loans at each period end.
(2) Allowance for loan and lease losses amount attributable to FDIC loss share agreements for purchased credit impaired loans was $(549,000) for 2Q15, $(496,000) for 1Q15, $83,000 for 4Q14, $5.8 million for 3Q14, and $(394,000) for 2Q14.
(3) For each period presented, a portion of the Company's purchased credit impaired loans were contractually past due; however, such delinquencies were included in the Company's performance expectations in determining the fair values of purchased credit impaired loans at each acquisition and at subsequent valuation dates. All purchased credit impaired loan cash flows and the timing of such cash flows continue to be estimable and probable of collection and thus accretion income continues to be recognized on these assets. As such, purchased credit impaired loans are not considered to be nonperforming assets.

State Bank Financial Corporation
2Q15 Financial Supplement: Table 8
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
2Q15 change vs
(Dollars in thousands) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Average Balances
Interest-bearing deposits in other financial institutions $191,653 $320,248 $450,362 $476,190 $490,009 (128,595) (298,356)
Investment securities 821,998 807,002 603,101 523,488 481,240 14,996 340,758
Loans, excluding purchased credit impaired (1) 1,505,558 1,359,300 1,319,586 1,246,008 1,192,494 146,258 313,064
Purchased credit impaired loans 179,579 194,471 214,518 215,318 236,178 (14,892) (56,599)
Total earning assets 3,113,449 3,113,258 2,698,476 2,461,004 2,399,921 191 713,528
Total nonearning assets 202,975 210,455 159,733 148,772 191,104 (7,480) 11,871
Total assets 3,316,424 3,323,713 2,858,209 2,609,776 2,591,025 (7,289) 725,399
Interest-bearing transaction accounts 522,147 507,087 433,545 376,052 376,143 15,060 146,004
Savings & money market deposits 1,035,706 1,072,818 958,782 896,503 892,168 (37,112) 143,538
Time deposits less than $250,000 309,076 327,363 240,509 239,924 252,459 (18,287) 56,617
Time deposits $250,000 or greater 58,024 56,973 66,009 20,906 21,489 1,051 36,535
Brokered and wholesale time deposits 82,840 103,464 86,371 96,743 100,395 (20,624) (17,555)
Notes payable 2,767 2,771 2,775 2,778 3,365 (4) (598)
FHLB Advances 326
Securities sold under agreements to repurchase 8,900 24,971 4,284 (16,071) 8,900
Total interest-bearing liabilities 2,019,460 2,095,447 1,792,601 1,632,906 1,646,019 (75,987) 373,441
Noninterest-bearing deposits 739,025 648,379 554,350 495,531 465,941 90,646 273,084
Other liabilities 32,680 54,619 50,121 32,357 34,890 (21,939) (2,210)
Shareholders’ equity 525,259 525,268 461,137 448,982 444,175 (9) 81,084
Total liabilities and shareholders' equity 3,316,424 3,323,713 2,858,209 2,609,776 2,591,025 (7,289) 725,399
Interest Margins (2)
Interest-bearing deposits in other financial institutions .29% .27% .26% .26% .26% .02% .03%
Investment securities, tax-equivalent basis (3) 1.90 1.72 1.73 1.70 1.84 .18 .06
Loans, excluding purchased credit impaired, tax-equivalent basis (4) 4.84 4.87 4.85 5.17 5.19 (.03) (.35)
Purchased credit impaired loans 18.68 33.51 26.12 38.90 29.02 (14.83) (10.34)
Total earning assets 4.58% 5.37% 5.08% 6.44% 5.86% (.79)% (1.28)%
Interest-bearing transaction accounts .14 .14 .13 .13 .12 .02
Savings & money market deposits .46 .45 .46 .46 .45 .01 .01
Time deposits less than $250,000 .32 .30 .43 .54 .57 .02 (.25)
Time deposits $250,000 or greater .57 .55 .75 .78 .80 .02 (.23)
Brokered and wholesale time deposits .97 .94 1.02 1.08 .95 .03 .02
Notes payable 8.55 7.61 9.01 9.00 10.37 .94 (1.82)
FHLB Advances 1.22
Securities sold under agreements to repurchase .27 .24 .09 .03 .27
Total interest-bearing liabilities .39% .38% .43% .45% .45% .01% (.06)%
Net interest spread 4.19% 4.99% 4.65% 5.99% 5.41% (.80)% (1.22)%
Net interest margin 4.33% 5.11% 4.80% 6.14% 5.55% (.78)% (1.22)%

(1) Includes average nonaccrual loans of $4.9 million for 2Q15, $5.1 million for 1Q15, $5.6 million for 4Q14, $1.7 million for 3Q14, and $2.0 million for 2Q14.
(2) Interest income or expense 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 $5,000 for 2Q15, $27,000 for 1Q15, $4,000 for 4Q14, $7,000 for 3Q14, and $11,000 for 2Q14.
(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 $104,000 for 2Q15, $98,000 for 1Q15, $80,000 for 4Q14, $75,000 for 3Q14, and $66,000 for 2Q14.

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