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State Bank Financial Corporation Reports Operating Income of $11.4 Million for Third Quarter 2015

  • Operating Earnings Per Diluted Share of $.31
  • $98 Million of Net Loan Growth, or 19% Annualized
  • Announced Organizational Realignment as Part of Broader Efficiency Initiative in September
  • Acquisition of Equipment Finance Group Subsequent to Quarter-End

ATLANTA, Oct. 22, 2015 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced operating income of $11.4 million, or $.31 per fully diluted share for the quarter ended September 30, 2015, compared to $7.7 million, or $.21 per fully diluted share for the second quarter of 2015. Interest income on loans improved to $24.2 million, a $1.1 million increase from the second quarter of 2015, and was driven by continued strong loan growth. Additionally, recovery activity, much of which would have previously been shared with the FDIC under the bank’s now terminated loss share agreements, contributed significantly to the improvement in operating income.

Operating income excludes severance and merger-related expenses that are not considered part of ongoing operations. Including those items, net income for the third quarter of 2015 was $9.1 million, compared to a net loss of $2.0 million for the second quarter of 2015. Fully diluted earnings per share were $.25 in the third quarter of 2015 compared to a fully diluted loss per share of $.06 in the second quarter of 2015.

Joe Evans, Chairman and CEO of State Bank Financial, commented, "This was another quarter of solid fundamentals as loans, core deposits, and fee income businesses continue to grow at an impressive pace. Also, recovery income related to previously charged-off loans exceeded expectations. I am pleased with the results of the third quarter, but even more pleased with the outlook."

Acquisition of Patriot Capital

In a separate release today, State Bank and Trust Company announced that it purchased the equipment finance origination platform of Patriot Capital Corporation, a leading provider of equipment financing to the retail petroleum industry. Patriot Capital is a privately owned company with 17 employees that finances equipment throughout the continental United States. Patriot Capital was founded in 2000 and is based in Atlanta, Georgia.

Tom Wiley, President of State Bank Financial, added, "I am very pleased with our strong loan growth this quarter and am excited about the addition of Patriot Capital's production in future periods. We expect our acquisition of Patriot Capital will further diversify and broaden our asset generating capabilities."

Operating Highlights

Net interest income of $37.4 million in the third quarter of 2015 increased from $33.5 million in the second quarter of 2015 due to higher interest and accretion income on loans. Interest income on loans, excluding purchased credit impaired loans, for the third quarter of 2015 was $24.2 million, up $1.1 million from $23.1 million in the prior quarter. Accretion income on loans was $11.2 million in the third quarter of 2015, up from $8.4 million in the second quarter of 2015 due primarily to larger gains from early loan payoffs compared to the previous quarter. Base accretion declined $764,000 in the third quarter of 2015 compared to the prior quarter. As of September 30, 2015, approximately $97 million of accretable discount remains to be recognized as loan accretion income, compared to $104 million of accretable discount remaining at the end of the second quarter of 2015. Interest expense of $2.0 million in the third quarter of 2015 was essentially flat compared to the prior quarter. Cost of funds for the third quarter of 2015 was 28 basis points, down one basis point from the second quarter of 2015.

The organic loan portfolio continued to perform well in the third quarter of 2015 as past due organic loans represented only eight basis points of total organic loans. A net provision benefit of $265,000 was recognized in the third quarter of 2015, consisting of an $873,000 benefit to the provision on purchased credit impaired loans due to improving cash flow expectations. This was partially offset by a $614,000 provision expense on organic loans due to loan growth in the quarter.

Noninterest income, excluding amortization of the FDIC receivable for loss share agreements in the second quarter of 2015, was $8.9 million for the third quarter of 2015, down from $9.3 million in the second quarter of 2015. Noninterest income was negatively affected by the hedges on underlying fixed-rate loans, which contributed to a $636,000 linked-quarter decline. In addition, a decline in mortgage banking income was largely offset by increases in SBA and payroll fee income.

Total noninterest expense for the third quarter of 2015 was $32.4 million, a $1.1 million increase from the second quarter of 2015, due almost entirely to higher salary and benefit costs as a result of severance related to the organizational realignment announced in September 2015. Severance expenses totaled $3.0 million in the third quarter of 2015 compared to $443,000 in the second quarter of 2015. Merger-related expenses totaled $717,000 in the third quarter of 2015, down from $876,000 in the second quarter of 2015.

Financial Condition

Total assets at September 30, 2015 were $3.4 billion, up from $3.3 billion at June 30, 2015. Period-end organic and purchased non-credit impaired loans increased to $2.0 billion at September 30, 2015, a net increase of $115.5 million from the second quarter of 2015. Purchased credit impaired loans decreased to $159.3 million at the end of the third quarter of 2015, an $18.0 million linked-quarter decline. Total net loans, excluding loans held for sale, were $2.1 billion at September 30, 2015, up $98.1 million from the second quarter of 2015.

Total deposits at September 30, 2015 were $2.8 billion, up from $2.7 billion at the end of the second quarter of 2015. Period-end noninterest-bearing demand deposits increased $61.0 million from the second quarter of 2015 and represented 29.4% of total deposits as of September 30, 2015. Average noninterest-bearing demand deposits increased $75.0 million from the second quarter of 2015, the 14th consecutive quarterly increase. Period-end and average transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $62.8 million and $39.4 million, respectively, from the second quarter of 2015.

Tangible book value per share was $13.78 at the end of the third quarter of 2015. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 15.04% and a Tier I risk-based capital ratio of 18.64%.

Comparison to the Third Quarter of 2014

Net operating income for the quarter ended September 30, 2015 decreased $284,000 compared to the same period in 2014. The decrease in operating income was primarily due to the $10.0 million decrease in accretion income as the third quarter of 2014 benefited from $9.2 million in gains from loan pool closeouts. Net income decreased $2.4 million from the third quarter of 2014 primarily as a result of severance and merger-related charges recognized in the third quarter of 2015. Net interest income declined $513,000 as an $8.1 million increase in interest income on loans was more than offset by the previously mentioned decline in accretion income. Cost of funds for the third quarter of 2015 of 28 basis points was down seven basis points from the third quarter of 2014.

Comparisons to the third quarter of 2014 are materially affected by State Bank's acquisitions of Atlanta Bancorporation, Inc. on October 1, 2014 and Georgia-Carolina Bancshares, Inc. on January 1, 2015.

Noninterest income, excluding amortization of the FDIC receivable, increased $5.3 million in the third quarter of 2015 compared to the third quarter of 2014, primarily as a result of the mortgage banking and SBA lending units acquired in our two acquisitions. Operating expenses were also impacted by the acquisitions and increased $6.5 million during the third quarter of 2015 compared to the third quarter of 2014.

Total loans increased $635.0 million during the year-over-year period as growth in organic loans of $403.0 million and purchased non-credit impaired loans of $285.4 million was partially offset by a $53.5 million decline in purchased credit impaired loans. Total deposits increased $639.2 million for the quarter ended September 30, 2015, compared to the third quarter of 2014, including growth in noninterest-bearing deposits of $298.5 million and interest-bearing transaction accounts of $122.2 million.

Detailed Results

Supplemental tables displaying financial results for the third quarter of 2015, the previous four quarters and year-to-date 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 these non-GAAP financial measures, please refer to 3Q15 Financial Supplement: Table 8, Condensed Operating Results to GAAP Earnings Reconciliation.

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: 1.800.708.4508

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 $3.4 billion in assets as of September 30, 2015, is an Atlanta-based bank holding company for State Bank and Trust Company. State Bank operates 26 banking offices in Metro Atlanta, Middle Georgia and Augusta, Georgia, and seven mortgage origination offices.

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

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, our outlook for future periods and our expectation that our acquisition of Patriot Capital will further diversify and broaden our asset-generating capabilities. 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
3Q15 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
3Q15 change vs
(Dollars in thousands, except per share amounts; taxable equivalent) 3Q15 2Q15 1Q15 4Q14 3Q14 2Q15 3Q14
Income Statement Highlights
Interest income on loans $24,397 $23,174 $21,498 $17,496 $16,237 $1,223 $8,160
Accretion income on loans 11,156 8,365 16,069 14,124 21,110 2,791 (9,954)
Interest income on invested funds 4,054 4,037 3,629 2,932 2,552 17 1,502
Total interest income (1) 39,607 35,576 41,196 34,552 39,899 4,031 (292)
Interest expense 1,977 1,972 1,979 1,923 1,857 5 120
Net interest income (1) 37,630 33,604 39,217 32,629 38,042 4,026 (412)
Provision for loan and lease losses (265) 64 3,193 1,189 416 (329) (681)
Adjusted (amortization) accretion of FDIC receivable for loss share agreements (1) (3) (492) (1,448) 1,652 (196) 492 196
Other noninterest income (1) (4) 8,894 9,319 10,250 5,285 3,624 (425) 5,270
Total operating noninterest income (1) (3) 8,894 8,827 8,802 6,937 3,428 67 5,466
Operating noninterest expense (1) (5) 28,687 30,038 29,585 23,999 22,207 (1,351) 6,480
Operating income before taxes (1) (3)(5) 18,102 12,329 15,241 14,378 18,847 5,773 (745)
Operating income tax expense (1) (6) 6,696 4,620 5,729 5,689 7,157 2,076 (461)
Operating income (1) (7) 11,406 7,709 9,512 8,689 11,690 3,697 (284)
Loss share termination, net of tax benefit (8,921) 8,921
Severance costs, net of tax benefit (1,847) (272) (224) (916) (49) (1,575) (1,798)
Merger-related expenses, net of tax benefit (440) (537) (84) (188) (137) 97 (303)
Net income (loss) available to common shareholders $9,119 $(2,021) $9,204 $7,585 $11,504 $11,140 $(2,385)
Common Share Data
Basic net income (loss) per share $.26 $(.06) $.27 $.24 $.36 $.32 $(.10)
Diluted net income (loss) per share .25 (.06) .26 .23 .35 .31 (.10)
Cash dividends declared per share .07 .06 .05 .04 .04 .01 .03
Book value per share 14.88 14.62 14.81 14.38 14.20 .26 .68
Tangible book value per share (1) 13.78 13.51 13.70 13.97 13.83 .27 (.05)
Market price per share (quarter end) 20.68 21.70 21.00 19.98 16.24 (1.02) 4.44
Common Shares Outstanding
Common stock 35,753,855 35,763,791 35,738,850 32,269,604 32,271,466 (9,936) 3,482,389
Weighted average shares outstanding:
Basic 34,687,354 34,654,689 33,593,687 31,794,828 31,723,875 32,665 2,963,479
Diluted (8) 37,068,387 34,654,689 35,642,302 33,462,979 33,253,907 2,413,698 3,814,480
Average Balance Sheet Highlights
Loans $2,136,746 $2,099,798 $1,986,008 $1,645,013 $1,461,326 $36,948 $675,420
Assets 3,344,023 3,316,424 3,323,713 2,858,209 2,609,776 27,599 734,247
Deposits 2,766,314 2,746,818 2,716,084 2,339,566 2,125,659 19,496 640,655
Liabilities 48,211 44,347 82,361 57,506 35,135 3,864 13,076
Equity 529,498 525,259 525,268 461,137 448,982 4,239 80,516
Tangible common equity 489,757 485,337 485,087 447,641 437,038 4,420 52,719


State Bank Financial Corporation
3Q15 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
3Q15 change vs
(Dollars in thousands, except per share amounts; taxable equivalent) 3Q15 2Q15 1Q15 4Q14 3Q14 2Q15 3Q14
Key Metrics (2)
Operating return on average assets (7) 1.35% .93% 1.16% 1.21% 1.78% .42% (.43)%
Operating return on average equity (7) 8.55 5.89 7.34 7.48 10.33 2.66 (1.78)
Return on average assets 1.08 (.24) 1.12 1.05 1.75 1.32 (.67)
Return on average equity 6.83 (1.54) 7.11 6.53 10.17 8.37 (3.34)
Yield on earning assets 4.98 4.58 5.37 5.08 6.44 .40 (1.46)
Cost of funds .28 .29 .29 .33 .35 (.01) (.07)
Rate on interest-bearing liabilities .40 .39 .38 .43 .45 .01 (.05)
Net interest margin 4.73 4.33 5.11 4.80 6.13 .40 (1.40)
Net interest margin excluding accretion income (9) 3.52 3.45 3.22 2.96 2.99 .07 .53
Average equity to average assets (1) 15.83 15.84 15.80 16.13 17.20 (.01) (1.37)
Leverage ratio 15.04 14.92 15.00 15.90 17.16 .12 (2.12)
Tier I risk-based capital ratio 18.64 19.12 19.51 23.12 25.17 (.48) (6.53)
Total risk-based capital ratio 19.73 20.28 20.70 24.37 26.42 (.55) (6.69)
Operating efficiency ratio (1) (3) (5) 61.66 70.79 61.61 60.66 53.55
Average loans to average deposits 77.24 76.44 73.12 70.31 68.75 .80 8.49
Noninterest-bearing deposits to total deposits 29.45 27.85 24.91 24.14 24.33 1.60 5.12


(1)Non-GAAP financial measure. See Condensed Operating Results to GAAP Earnings Reconciliation (Table 8) for further information.
(2)Income statement ratios and yield/rate information are annualized for the applicable period.
(3)Excludes the one-time loss share expense termination charge of $14.6 million in the second quarter of 2015.
(4)Includes all line items of noninterest income other than (amortization) accretion of FDIC receivable for loss share agreements.
(5)Excludes severance costs and merger-related expenses.
(6)Excludes the taxable equivalent adjustments on interest income and the income tax benefit relating to the one-time loss share expense termination charge, severance costs and merger-related expense.
(7)Excludes the one-time loss share expense termination charge, severance costs and merger-related expense, net of the income tax benefit.
(8)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.
(9)Excludes accretion income on loans and average purchased credit impaired loans.


State Bank Financial Corporation
3Q15 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
3Q15 change vs
(Dollars in thousands) 3Q15 2Q15 1Q15 4Q14 3Q14 2Q15 3Q14
Assets
Cash and amounts due from depository institutions $15,734 $21,903 $20,426 $10,550 $17,209 $(6,169) $(1,475)
Interest-bearing deposits in other financial institutions 153,937 179,831 285,971 470,608 459,271 (25,894) (305,334)
Cash and cash equivalents 169,671 201,734 306,397 481,158 476,480 (32,063) (306,809)
Investment securities available-for-sale 831,548 815,277 819,609 640,086 532,447 16,271 299,101
Loans 2,139,691 2,042,186 2,000,189 1,634,529 1,504,725 97,505 634,966
Allowance for loan and lease losses (1) (28,930) (29,569) (29,982) (28,638) (27,231) 639 (1,699)
Loans, net 2,110,761 2,012,617 1,970,207 1,605,891 1,477,494 98,144 633,267
Loans held-for-sale 59,563 64,047 45,211 3,174 1,283 (4,484) 58,280
Other real estate owned 11,363 15,055 16,848 8,568 15,169 (3,692) (3,806)
Premises and equipment, net 43,982 45,608 46,370 35,286 34,696 (1,626) 9,286
Goodwill 31,049 31,049 30,510 10,606 10,381 20,668
Other intangibles, net 8,486 8,922 9,045 2,752 1,511 (436) 6,975
SBA servicing rights 2,463 2,185 1,902 1,516 278 2,463
FDIC receivable for loss share agreements 17,098 22,320 26,221 (26,221)
Bank-owned life insurance 58,347 57,810 57,348 41,479 41,136 537 17,211
Other assets 61,440 46,004 31,363 29,374 30,779 15,436 30,661
Total assets $3,388,673 $3,300,308 $3,351,908 $2,882,210 $2,647,597 $88,365 $741,076
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits $823,146 $762,100 $691,938 $577,295 $524,634 $61,046 $298,512
Interest-bearing deposits 1,972,042 1,974,185 2,085,997 1,814,387 1,631,340 (2,143) 340,702
Total deposits 2,795,188 2,736,285 2,777,935 2,391,682 2,155,974 58,903 639,214
Securities sold under agreements to repurchase 4,872 11,747 8,250 (6,875) 4,872
Notes payable 2,761 2,765 2,769 2,771 2,776 (4) (15)
Other liabilities 53,691 26,527 33,708 23,662 30,570 27,164 23,121
Total liabilities 2,856,512 2,777,324 2,822,662 2,418,115 2,189,320 79,188 667,192
Total shareholders’ equity 532,161 522,984 529,246 464,095 458,277 9,177 73,884
Total liabilities and shareholders’ equity $3,388,673 $3,300,308 $3,351,908 $2,882,210 $2,647,597 $88,365 $741,076
Capital Ratios (2)
Average equity to average assets 15.83% 15.84% 15.80% 16.13% 17.20% (.01)% (1.37)%
Leverage ratio 15.04 14.92 15.00 15.90 17.16 .12 (2.12)
CET1 risk-based capital ratio 18.64 19.12 19.51 N/A N/A (.48) N/A
Tier I risk-based capital ratio 18.64 19.12 19.51 23.12 25.17 (.48) (6.53)
Total risk-based capital ratio 19.73 20.28 20.70 24.37 26.42 (.55) (6.69)


(1)Allowance for loan losses on purchased credit impaired loans was approximately $8.8 million at 3Q15, $10.0 million at 2Q15, $10.6 million at 1Q15, $10.2 million at 4Q14 and $8.4 million at 3Q14.
(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
3Q15 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
3Q15 change vs
(Dollars in thousands, except per share amounts) 3Q15 2Q15 1Q15 4Q14 3Q14 2Q15 3Q14
Net Interest Income:
Interest income on loans $24,218 $23,070 $21,400 $17,416 $16,162 $1,148 $8,056
Accretion income on loans 11,156 8,365 16,069 14,124 21,110 2,791 (9,954)
Interest income on invested funds 4,050 4,032 3,602 2,928 2,545 18 1,505
Interest expense 1,977 1,972 1,979 1,923 1,857 5 120
Net interest income 37,447 33,495 39,092 32,545 37,960 3,952 (513)
Provision for loan and lease losses (265) 64 3,193 1,189 416 (329) (681)
Net interest income after provision for loan and lease losses 37,712 33,431 35,899 31,356 37,544 4,281 168
Noninterest Income:
(Amortization) accretion of FDIC receivable for loss share agreements (15,040) (1,448) 1,652 (196) 15,040 196
Service charges on deposits 1,491 1,501 1,489 1,274 1,206 (10) 285
Mortgage banking income 3,079 3,480 2,680 322 191 (401) 2,888
Payroll fee income 1,004 956 1,158 1,050 875 48 129
SBA income 1,720 1,380 1,123 477 340 1,720
ATM income 742 773 725 624 621 (31) 121
Bank-owned life insurance income 537 462 455 343 333 75 204
Gain (loss) on sale of investment securities 17 (59) 380 223 76 17
Other 304 826 2,240 972 398 (522) (94)
Total noninterest income 8,894 (5,721) 8,802 6,937 3,428 14,615 5,466
Noninterest Expense:
Salaries and employee benefits 23,293 20,506 19,582 17,797 14,644 2,787 8,649
Occupancy and equipment 3,113 3,219 3,105 2,615 2,440 (106) 673
Data processing 2,097 2,435 2,280 1,909 1,758 (338) 339
Legal and professional fees 1,144 1,284 1,484 844 851 (140) 293
Merger-related expenses 717 876 137 306 223 (159) 494
Marketing 491 599 436 491 453 (108) 38
Federal deposit insurance premiums and other regulatory fees 621 455 506 393 356 166 265
Loan collection and OREO costs (1,198) (114) 405 (112) (1,084) (1,198)
Amortization of intangibles 436 442 417 257 152 (6) 284
Other 1,702 1,655 1,735 1,299 1,633 47 69
Total noninterest expense 32,416 31,357 30,087 25,799 22,510 1,059 9,906
Income (Loss) Before Income Taxes 14,190 (3,647) 14,614 12,494 18,462 17,837 (4,272)
Income tax expense (benefit) 5,071 (1,626) 5,410 4,909 6,958 6,697 (1,887)
Net Income (Loss) $9,119 $(2,021) $9,204 $7,585 $11,504 $11,140 $(2,385)
Net Income (Loss) Per Share
Basic $.26 $(.06) $.27 $.24 $.36 $.32 $(.10)
Diluted .25 (.06) .26 .23 .35 .31 (.10)
Weighted Average Shares Outstanding
Basic 34,687,354 34,654,689 33,593,687 31,794,828 31,723,875 32,665 2,963,479
Diluted 37,068,387 34,654,689 35,642,302 33,462,979 33,253,907 2,413,698 3,814,480


State Bank Financial Corporation
3Q15 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)
Nine Months Ended September 30 YTD Change
(Dollars in thousands, except per share amounts) 2015 2014
Net Interest Income:
Interest income on loans $68,688 $46,760 $21,928
Accretion income on loans 35,590 64,733 (29,143)
Interest income on invested funds 11,684 7,560 4,124
Interest expense 5,928 5,597 331
Net interest income 110,034 113,456 (3,422)
Provision for loan and lease losses 2,992 1,707 1,285
Net interest income after provision for loan and lease losses 107,042 111,749 (4,707)
Noninterest Income:
Amortization of FDIC receivable for loss share agreements (16,488) (17,437) 949
Service charges on deposits 4,481 3,560 921
Mortgage banking income 9,239 513 8,726
Payroll fee income 3,118 2,650 468
SBA income 4,223 4,223
ATM income 2,240 1,847 393
Bank-owned life insurance income 1,454 991 463
Gain on sale of investment securities 338 23 315
Other 3,370 518 2,852
Total noninterest income 11,975 (7,335) 19,310
Noninterest Expense:
Salaries and employee benefits 63,381 44,296 19,085
Occupancy and equipment 9,437 7,283 2,154
Data processing 6,812 5,144 1,668
Legal and professional fees 3,912 2,596 1,316
Merger-related expenses 1,730 488 1,242
Marketing 1,526 1,333 193
Federal deposit insurance premiums and other regulatory fees 1,582 1,027 555
Loan collection and OREO costs (907) 592 (1,499)
Amortization of intangibles 1,295 475 820
Other 5,092 4,435 657
Total noninterest expense 93,860 67,669 26,191
Income Before Income Taxes 25,157 36,745 (11,588)
Income tax expense 8,855 13,412 (4,557)
Net Income $16,302 $23,333 $(7,031)
Net Income Per Share
Basic $.48 $.74 $(.26)
Diluted .45 .70 (.25)
Weighted Average Shares Outstanding
Basic 34,315,916 31,700,092 2,615,824
Diluted 36,594,476 33,214,953 3,379,523


State Bank Financial Corporation
3Q15 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
3Q15 change vs
(Dollars in thousands) 3Q15 2Q15 1Q15 4Q14 3Q14 2Q15 3Q14
Composition of Loans
Organic loans (1):
Construction, land & land development $412,788 $399,982 $388,148 $310,987 $324,008 $12,806 $88,780
Other commercial real estate 705,616 634,943 606,347 609,478 591,672 70,673 113,944
Total commercial real estate 1,118,404 1,034,925 994,495 920,465 915,680 83,479 202,724
Residential real estate 127,823 118,612 107,554 91,448 80,231 9,211 47,592
Owner-occupied real estate 212,171 205,805 191,557 188,933 164,514 6,366 47,657
Commercial, financial & agricultural 165,305 126,157 108,929 90,930 102,417 39,148 62,888
Leases 54,814 26,709 21,491 19,959 19,636 28,105 35,178
Consumer 16,432 12,078 9,442 8,658 9,445 4,354 6,987
Total organic loans 1,694,949 1,524,286 1,433,468 1,320,393 1,291,923 170,663 403,026
Purchased non-credit impaired loans(2):
Construction, land & land development 37,326 61,089 67,129 2,166 (23,763) 37,326
Other commercial real estate 79,878 91,212 94,917 26,793 (11,334) 79,878
Total commercial real estate 117,204 152,301 162,046 28,959 (35,097) 117,204
Residential real estate 75,987 82,668 88,871 43,669 (6,681) 75,987
Owner-occupied real estate 69,619 73,409 77,946 22,743 (3,790) 69,619
Commercial, financial & agricultural 19,529 28,656 42,494 11,635 (9,127) 19,529
Consumer 3,080 3,505 4,517 791 (425) 3,080
Total purchased non-credit impaired loans 285,419 340,539 375,874 107,797 (55,120) 285,419
Purchased credit impaired loans (3):
Construction, land & land development 16,473 20,002 18,791 24,544 25,463 (3,529) (8,990)
Other commercial real estate 42,637 48,187 54,211 58,680 54,573 (5,550) (11,936)
Total commercial real estate 59,110 68,189 73,002 83,224 80,036 (9,079) (20,926)
Residential real estate 67,218 70,537 74,876 78,793 80,859 (3,319) (13,641)
Owner-occupied real estate 30,655 35,036 39,210 42,168 48,834 (4,381) (18,179)
Commercial, financial & agricultural 2,132 3,234 3,427 1,953 2,790 (1,102) (658)
Consumer 208 365 332 201 283 (157) (75)
Total purchased credit impaired loans 159,323 177,361 190,847 206,339 212,802 (18,038) (53,479)
Total loans $2,139,691 $2,042,186 $2,000,189 $1,634,529 $1,504,725 $97,505 $634,966
Composition of Deposits
Noninterest-bearing demand deposits $823,146 $762,100 $691,938 $577,295 $524,634 $61,046 $298,512
Interest-bearing transaction accounts 499,434 497,715 562,378 495,966 377,220 1,719 122,214
Savings and money market deposits 1,059,770 1,038,292 1,052,677 954,626 910,488 21,478 149,282
Time deposits less than $250,000 289,815 301,431 319,118 247,757 234,145 (11,616) 55,670
Time deposits $250,000 or greater 56,750 59,105 58,076 18,946 20,418 (2,355) 36,332
Brokered and wholesale time deposits 66,273 77,642 93,748 97,092 89,069 (11,369) (22,796)
Total deposits $2,795,188 $2,736,285 $2,777,935 $2,391,682 $2,155,974 $58,903 $639,214


(1)Loans originated by State Bank and Trust Company ("State 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, including all loans acquired from the FDIC.


State Bank Financial Corporation
3Q15 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
3Q15 change vs
(Dollars in thousands) 3Q15 2Q15 1Q15 4Q14 3Q14 2Q15 3Q14
Allowance for loan and lease losses on organic loans
Beginning Balance $19,594 $19,424 $18,392 $18,828 $17,885 $170 $1,709
Charge-offs (63) (64) (76) (1,250) (87) 1 24
Recoveries 31 12 38 39 30 19 1
Net (charge-offs) recoveries (32) (52) (38) (1,211) (57) 20 25
Provision for loan and lease losses 614 222 1,070 775 1,000 392 (386)
Ending Balance $20,176 $19,594 $19,424 $18,392 $18,828 $582 $1,348
Allowance for loan and lease losses on purchased loans (1) (2)
Beginning Balance $9,975 $10,558 $10,246 $8,403 $17,722 $(583) $(7,747)
Charge-offs (3,282) (2,201) (3,231) (898) (5,329) (1,081) 2,047
Recoveries 2,940 1,227 924 2,410 2,417 1,713 523
Net (charge-offs) recoveries (342) (974) (2,307) 1,512 (2,912) 632 2,570
Provision for loan and lease losses (879) 391 2,619 331 (6,407) (1,270) 5,528
Ending Balance $8,754 $9,975 $10,558 $10,246 $8,403 $(1,221) $351
Nonperforming organic assets
Nonaccrual loans $1,848 $1,649 $1,428 $1,245 $740 $199 $1,108
Troubled debt restructurings 3,269 3,322 3,374 4,301 875 (53) 2,394
Total nonperforming organic loans 5,117 4,971 4,802 5,546 1,615 146 3,502
Other real estate owned 500 160 74 410 340 90
Total nonperforming organic assets $5,617 $5,131 $4,802 $5,620 $2,025 $486 $3,592
Ratios for organic assets
Annualized QTD charge-offs (recoveries) to average organic loans .01% .01% .01% .36% .02% % (.01)%
Nonperforming loans to organic loans .30 .33 .33 .42 .13 (.03) .17
Nonperforming assets to organic loans + OREO .33 .34 .33 .43 .16 (.01) .17
Past due loans to organic loans .08 .08 .11 .17 .10 (.02)
Allowance for loan and lease losses to organic loans 1.19 1.29 1.36 1.39 1.46 (.10) (.27)
Ratios for purchased non-credit impaired loans
Annualized QTD charge-offs (recoveries) to average PNCI loans (.01)% .04% % % N/A (.05)% N/A
Nonperforming loans to PNCI loans .57 .07 .04 .10 N/A .50 N/A
Past due loans to PNCI loans .64 .49 .36 .46 N/A .15 N/A
Ratios for purchased credit impaired loans (3)
Annualized QTD charge-offs (recoveries) to average PCI loans .83% 2.07% 4.81% (2.80)% 5.37% (1.24)% (4.54)%
Past due loans to PCI loans 14.15 13.30 18.48 15.62 15.14 .85 (.99)
Allowance for loan and lease losses to PCI loans 5.49 5.62 5.53 4.97 3.95 (.13) 1.54


(1)Includes purchased non-credit impaired and purchased credit impaired activity. Net recoveries (charge-offs) for purchased non-credit impaired loans were $6,000 for 3Q15, $(46,000) for 2Q15 and $(2,000) for 2Q15 with a corresponding provision for loan and lease losses for each of the periods, 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 $0 for 3Q15, $(549,000) for 2Q15, $(496,000) for 1Q15, $83,000 for 4Q14, and $5.8 million for 3Q14.
(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
3Q15 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
3Q15 change vs
(Dollars in thousands) 3Q15 2Q15 1Q15 4Q14 3Q14 2Q15 3Q14
Average Balances
Interest-bearing deposits in other financial institutions $179,526 $191,653 $320,248 $450,362 $476,190 (12,127) (296,664)
Investment securities 837,786 821,998 807,002 603,101 523,488 15,788 314,298
Loans, excluding purchased credit impaired (1) 1,969,651 1,920,219 1,791,537 1,430,495 1,246,008 49,432 723,643
Purchased credit impaired loans 167,095 179,579 194,471 214,518 215,318 (12,484) (48,223)
Total earning assets 3,154,058 3,113,449 3,113,258 2,698,476 2,461,004 40,609 693,054
Total nonearning assets 189,965 202,975 210,455 159,733 148,772 (13,010) 41,193
Total assets 3,344,023 3,316,424 3,323,713 2,858,209 2,609,776 27,599 734,247
Interest-bearing transaction accounts 486,514 522,147 507,087 433,545 376,052 (35,633) 110,462
Savings & money market deposits 1,042,941 1,035,706 1,072,818 958,782 896,503 7,235 146,438
Time deposits less than $250,000 295,304 309,725 327,807 240,509 239,924 (14,421) 55,380
Time deposits $250,000 or greater 57,511 57,375 56,529 66,009 20,906 136 36,605
Brokered and wholesale time deposits 70,004 82,840 103,464 86,371 96,743 (12,836) (26,739)
Other borrowings 15,507 11,667 27,742 7,385 2,778 3,840 12,729
Total interest-bearing liabilities 1,967,781 2,019,460 2,095,447 1,792,601 1,632,906 (51,679) 334,875
Noninterest-bearing deposits 814,040 739,025 648,379 554,350 495,531 75,015 318,509
Other liabilities 32,704 32,680 54,619 50,121 32,357 24 347
Shareholders’ equity 529,498 525,259 525,268 461,137 448,982 4,239 80,516
Total liabilities and shareholders' equity 3,344,023 3,316,424 3,323,713 2,858,209 2,609,776 27,599 734,247
Interest Margins (2)
Interest-bearing deposits in other financial institutions .27% .29% .27% .26% .26% (.02)% .01%
Investment securities, tax-equivalent basis (3) 1.86 1.90 1.72 1.73 1.70 (.04) .16
Loans, excluding purchased credit impaired, tax-equivalent basis (4) 4.91 4.84 4.87 4.85 5.17 .07 (.26)
Purchased credit impaired loans 26.49 18.68 33.51 26.12 38.90 7.81 (12.41)
Total earning assets 4.98% 4.58% 5.37% 5.08% 6.44% .40% (1.46)%
Interest-bearing transaction accounts .13 .14 .14 .13 .13 (.01)
Savings & money market deposits .47 .46 .45 .46 .46 .01 .01
Time deposits less than $250,000 .38 .24 .21 .43 .54 .14 (.16)
Time deposits $250,000 or greater .36 .99 1.03 .75 .78 (.63) (.42)
Brokered and wholesale time deposits .97 .97 .94 1.02 1.08 (.11)
Other borrowings 1.69 2.23 .98 3.55 9.00 (.54) (7.31)
Total interest-bearing liabilities .40% .39% .38% .43% .45% .01% (.05)%
Net interest spread 4.58% 4.19% 4.99% 4.65% 5.99% .39% (1.41)%
Net interest margin 4.73% 4.33% 5.11% 4.80% 6.13% .40% (1.40)%
Net interest margin excluding accretion income 3.52% 3.45% 3.22% 2.96% 2.99% .07% .53%


(1)Includes average nonaccrual loans of $5.9 million for 3Q15, $4.9 million for 2Q15, $5.1 million for 1Q15, $5.6 million for 4Q14, and $1.7 million for 3Q14.
(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 $4,000 for 3Q15, $5,000 for 2Q15, $27,000 for 1Q15, $4,000 for 4Q14, and $7,000 for 3Q14.
(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 $179,000 for 3Q15, $104,000 for 2Q15, $98,000 for 1Q15, $80,000 for 4Q14, and $75,000 for 3Q14.


State Bank Financial Corporation
3Q15 Financial Supplement: Table 8
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
3Q15 change vs
(dollars in thousands, except per share amounts; taxable equivalent)3Q15 2Q15 1Q15 4Q14 3Q14 2Q15 3Q14
Interest income reconciliation
Interest income - taxable equivalent$39,607 $35,576 $41,196 $34,552 $39,899 $4,031 $(292)
Taxable equivalent adjustment(183) (109) (125) (84) (82) (74) (101)
Interest income (GAAP)$39,424 $35,467 $41,071 $34,468 $39,817 $3,957 $(393)
Net interest income reconciliation
Net interest income - taxable equivalent$37,630 $33,604 $39,217 $32,629 $38,042 $4,026 $(412)
Taxable equivalent adjustment(183) (109) (125) (84) (82) (74) (101)
Net interest income (GAAP)$37,447 $33,495 $39,092 $32,545 $37,960 $3,952 $(513)
Adjusted (amortization) accretion of FDIC receivable for loss share agreements
Adjusted (amortization) accretion of FDIC receivable for loss share agreements$ $(492) $(1,448) $1,652 $(196) $492 $196
Loss share termination (14,548) 14,548
(Amortization) accretion of FDIC receivable for loss share agreements (GAAP)$ $(15,040) $(1,448) $1,652 $(196) $15,040 $196
Operating noninterest income reconciliation
Operating noninterest income$8,894 $8,827 $8,802 $6,937 $3,428 $67 $5,466
Loss share termination (14,548) 14,548
Total noninterest income (GAAP)$8,894 $(5,721) $8,802 $6,937 $3,428 $14,615 $5,466
Operating noninterest expense reconciliation
Operating noninterest expense$28,687 $30,038 $29,585 $23,999 $22,207 $(1,351) $6,480
Merger-related expenses717 876 137 306 223 (159) 494
Severance costs3,012 443 365 1,494 80 2,569 2,932
Total noninterest expense (GAAP)$32,416 $31,357 $30,087 $25,799 $22,510 $1,059 $9,906
Operating income before taxes reconciliation
Operating income before taxes$18,102 $12,329 $15,241 $14,378 $18,847 $5,773 $(745)
Loss share termination (14,548) 14,548
Merger-related expenses(717) (876) (137) (306) (223) 159 (494)
Severance costs(3,012) (443) (365) (1,494) (80) (2,569) (2,932)
Taxable equivalent adjustment to interest income(183) (109) (125) (84) (82) (74) (101)
Income (loss) before taxes (GAAP)$14,190 $(3,647) 14,614 12,494 $18,462 $17,837 $(4,272)
State Bank Financial Corporation
3Q15 Financial Supplement: Table 8 (continued)
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
3Q15 change vs
(dollars in thousands, except per share amounts; taxable equivalent)3Q15 2Q15 1Q15 4Q14 3Q14 2Q15 3Q14
Operating income tax reconciliation
Operating income tax expense$6,696 $4,620 $5,729 $5,689 $7,157 $2,076 $(461)
Loss share termination tax benefit (5,627) 5,627
Merger-related expenses tax benefit(277) (339) (53) (118) (86) 62 (191)
Severance costs tax benefit(1,165) (171) (141) (578) (31) (994) (1,134)
Taxable equivalent adjustment to interest income(183) (109) (125) (84) (82) (74) (101)
Income tax expense (GAAP)$5,071 $(1,626) $5,410 $4,909 $6,958 $6,697 $(1,887)
Operating income reconciliation
Operating income$11,406 $7,709 $9,512 $8,689 $11,690 $3,697 $(284)
Loss share termination, net of tax benefit (8,921) 8,921
Merger-related expenses, net of tax benefit(440) (537) (84) (188) (137) 97 (303)
Severance costs, net of tax benefit(1,847) (272) (224) (916) (49) (1,575) (1,798)
Net income (GAAP)$9,119 $(2,021) $9,204 $7,585 $11,504 $11,140 (2,385)
Book value per common share reconciliation
Tangible book value per common share$13.78 $13.51 $13.70 $13.97 $13.83 $0.27 $(.05)
Effect of goodwill and other intangibles1.10 1.11 1.11 .41 .37 (.01) .73
Book value per common share (GAAP)$14.88 $14.62 $14.81 $14.38 $14.20 $0.26 $.68
Average equity to average assets reconciliation
Average tangible common equity to average assets14.63% 14.63% 14.59% 15.66% 16.75% % (2.12)%
Effect of average goodwill and other intangibles1.20 1.21 1.21 .47 .45 (.01) .75
Average equity to average assets (GAAP)15.83% 15.84% 15.80% 16.13% 17.20% (.01)% (1.37)%
Efficiency ratio reconciliation
Operating efficiency ratio61.66% 70.79% 61.61% 60.66% 53.55% (9.13)% 8.11%
Effect of tax equivalent adjustment to interest income, loss share termination, merger-related expenses, and severance costs8.29% 42.11 1.21 4.68 .84 (33.82)% 7.45%
Efficiency ratio (GAAP)69.95% 112.90% 62.82% 65.34% 54.39% (42.95)% 15.56%


(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, adjusted (amortization) accretion of FDIC receivable for loss share agreements, operating noninterest income, operating noninterest expense, operating income before taxes - taxable equivalent, operating income tax expense, tangible book value per common share and operating efficiency ratio. 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.

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