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State Bank Corp. Earnings Increase 83.0% to $946,000 or $0.16 per Share, in 4Q15 from 4Q14; Highlighted by the Continuing Improvement in Credit Quality

LAKE HAVASU CITY, Ariz., Jan. 22, 2016 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCQB:SBAZ) (“Company”), the holding company for Mohave State Bank (“Bank”), today announced net income grew to $946,000 , or $0.16 per diluted share, for the fourth quarter of 2015, as compared to net income of $517,000, or $0.09 per diluted share, for the same period of 2014.

For the year ended December 31, 2015, net income totaled $3.47 million, or $0.59 per diluted share. Following a $2.8 million income tax benefit as a result of the reduction of its deferred tax valuation allowance State Bank Corp.’s net income was $5.40 million, or $0.92 per diluted share, in 2014. Pretax income increased 101.5% to $5.18 million for the year ended 2015 compared to $2.57 million for the year ended 2014, reflecting the growth in net interest income and reduced credit resolution costs.

“Our results this quarter and the full year reflect our focus on improving profitability and making the necessary investments to drive future growth. Effectively managing each of these areas is key to helping us take advantages of the opportunities we see ahead,” stated Brian M. Riley, President and Chief Executive Officer. “Both loan and deposit growth is strong compared to a year ago, despite the loan and deposit sale from the sale of our Yuma branch during the preceding quarter. We are focused on building the premier community banking franchise in Arizona and are positioning ourselves to grow, serve our customers and create strong returns for our shareholders.”

Fourth Quarter 2015 Financial Highlights:

  • Net income increased 83.0% to $946,000 in the fourth quarter, compared to $517,000 in the fourth quarter 2014.
  • The net interest margin remained strong at 4.29%.
  • Non-performing assets decreased by $4.3 million to $6.4 million on continued resolution of problem credits and the sale of a large foreclosed asset. Non-performing assets dropped to their lowest level since 2008.
  • Core deposits comprise 79.1% of total deposits at December 31, 2015.
  • Tangible book value per share increased to $6.47 per share, compared to $5.99 a year ago.

No provision for loan losses was taken in the fourth quarter with net credit recoveries of $65,000. The allowance for loan losses totaled $3.1 million at December 31, 2015, or 1.42% of loans held for investment.

Total assets were $325.3 million at December 31, 2015, an increase of $8.5 million, or 2.7% from $316.8 million at December 31, 2014. Total loans held for investment were $216.4 million as compared to $209.0 million at December 31, 2014. Total loan comparisons were affected by the sale of loans from the Yuma branch of $11.1 million in the third quarter.

Total deposits were $282.8 million, an increase of $5.3 million, or 1.9%, from $277.5 million at December 31, 2014. Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased 4.13% compared to a year earlier to $223.9 million at December 31, 2015. Total deposits and core deposit comparisons were affected by the sale of deposits from the Yuma branch of $16.5 million and $12.8 million, respectively. Core deposits now comprise 79.1% of total deposits.

Nonperforming assets were $6.4 million at December 31, 2015, a 56.8% decrease compared to $14.8 million at December 31, 2014. Nonperforming assets represented 1.97% of total assets at December 31, 2015, down from 4.67% at December 31, 2014.

Shareholder equity increased to $37.8 million at December 31, 2015, from $35.1 million at December 31, 2014. At December 31, 2015 tangible book value per share improved 8.0% to $6.47 per share compared to $5.99 per share at December 31, 2014.

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 December 31, 2015. The Bank reported the following capital ratios at December 31, 2015:

Common Equity Tier 1 Capital Ratio 14.70%
Tier 1 Leverage Ratio 11.61%
Tier 1 Capital Ratio 14.70%
Total Capital Ratio 15.91%

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 five full-service branches: two in Lake Havasu City, two in Kingman and one in Bullhead City, 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., Mohave State Bank, Country Bank and the proposed merger. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: the expected cost savings, synergies and other financial benefits from the merger might not be realized within the expected time frames or at all; regulatory approvals of the merger may not be obtained or adverse regulatory conditions may be imposed in connection with such regulatory approvals; and conditions to the closing of the merger may not be satisfied. Annualized, pro forma, projected and estimated numbers in this press release are used for illustrative purposes only, are not forecasts and may not reflect actual results. All forward-looking statements included in this press release are based on information available at the time of the release, and State Bank Corp., Mohave State Bank and Country Bank assume no obligation to update any forward-looking statements.

UNAUDITED FINANCIAL STATEMENTS FOLLOW

State Bank Corp.
Statement of Operations
For the Quarter Ended Year to Date
Dollars in thousands - Unaudited12/31/2015 9/30/2015 12/31/2014 12/31/2015 12/31/2014
Statements of Operations
Interest income
Loans, including fees$ 3,019 $ 3,186 $ 2,759 $ 12,019 $ 10,858
Securities 212 209 207 858 811
Fed funds and other 19 14 26 65 70
Total interest income 3,250 3,409 2,992 12,942 11,739
Interest expense
Deposits 151 153 141 581 552
Borrowings 1 1 14 26 56
Total interest expense 152 154 155 607 608
Net interest income 3,098 3,255 2,837 12,335 11,131
Provision for loan losses 425 75 885 695
Net interest income after loan loss provision 3,098 2,830 2,762 11,450 10,436
Noninterest income
Service charges on deposits 85 89 118 358 430
Mortgage loan fees 190 241 150 928 432
Gain on sale of loans 253 180 426 1,492 1,260
Gain/(Loss) on securities - - (8) (42)
Other income 174 886 209 1,435 761
Total noninterest income 702 1,396 903 4,205 2,841
Noninterest expense
Salaries and employee benefits 1,483 1,447 1,387 5,913 5,310
Net occupancy expense 90 102 94 367 377
Equipment expense 44 47 37 175 152
Data processing 243 246 281 1,069 1,078
Director fees & expenses 66 55 62 231 202
Insurance 35 26 26 112 114
Marketing & promotion 69 57 82 334 332
Professional fees 180 82 85 434 485
Office expense 70 28 28 163 109
Regulatory assessments 32 106 113 353 444
OREO and repossessed assets 39 214 791 650 1,579
Other expenses 149 158 82 676 524
Total noninterest expense 2,500 2,568 3,068 10,477 10,706
Income (loss) before provision (benefit) for income taxes 1,300 1,658 597 5,178 2,571
Provision (benefit) for income taxes 354 591 80 1,712 (2,825)
Net Income (Loss)$ 946 $ 1,067 $ 517 $ 3,466 $ 5,396
Per Share Data
Basic EPS $ 0.16 $ 0.18 $ 0.09 $ 0.59 $ 0.92
Diluted EPS $ 0.16 $ 0.18 $ 0.09 $ 0.59 $ 0.92
Average shares outstanding
Basic 5,849,444 5,866,038 5,868,038 5,862,847 5,868,038
Effect of dilutive shares - - - - -
Diluted 5,849,444 5,866,038 5,868,038 5,862,847 5,868,038

State Bank Corp.
Balance Sheets
Dollars in thousands - Unaudited12/31/2015 12/31/2014
Consolidated Balance Sheets
Assets
Cash and cash equivalents$ 1,899 $ 1,679
Interest bearing deposits 4,167 3,459
Overnight Funds 29,250 31,740
Held for maturity securities 19 27
Available for sale securities 46,881 39,814
Total cash and securities 82,216 76,719
Loans held for sale, before reserves 4,457 1,300
Gross loans held for investment 216,357 209,012
Loan loss reserve (3,089) (2,954)
Total net loans 217,725 207,358
Premises and equipment, net 8,195 9,892
Other real estate owned 4,247 9,307
Federal Home Loan Bank and other stock 2,126 1,917
Company owned life insurance 6,034 5,871
Other assets 4,776 5,721
Total Assets$ 325,319 $ 316,785
Liabilities
Non interest bearing demand$ 70,648 $ 62,612
Money market, NOW and savings 153,156 152,308
Time deposits <$100K 25,703 25,929
Time deposits >$100K 33,329 36,644
Total Deposits 282,836 277,493
Securities sold under repurchase agreements 3,653 2,734
Federal Home Loan Bank advances - -
Subordinated debt - 675
Total Debt 3,653 3,409
Other Liabilities 1,047 746
Total Liabilities 287,536 281,648
Shareholders' Equity
Common stock 24,927 25,037
Accumulated retained earnings 12,881 9,866
Accumulated other comprehensive income (25) 234
Total shareholders equity 37,783 35,137
Total liabilities and shareholders' equity$ 325,319 $ 316,785

State Bank Corp.
Five-Quarter Performance Summary
For the Quarter Ended
Dollars in thousands - Unaudited12/31/20159/30/20156/30/20153/31/201512/31/2014
Performance Highlights
Earnings:
Total revenue (Net int. income + nonint. income)$ 3,800 $ 4,651 $ 4,123 $ 3,965 $ 3,740
Net interest income$ 3,098 $ 3,255 $ 3,118 $ 2,864 $ 2,837
Provision for loan losses$ - $ 425 $ 350 $ 110 $ 75
Noninterest income$ 702 $ 1,396 $ 1,005 $ 1,101 $ 903
Noninterest expense$ 2,500 $ 2,568 $ 2,588 $ 2,821 $ 3,068
Net income (loss)$ 946 $ 1,067 $ 772 $ 681 $ 517
Per Share Data:
Net income (loss), basic $ 0.16 $ 0.18 $ 0.13 $ 0.12 $ 0.09
Net income (loss), diluted $ 0.16 $ 0.18 $ 0.13 $ 0.12 $ 0.09
Cash dividends declared$ - $ - $ - $ 0.07 $ -
Book value$ 6.47 $ 6.34 $ 6.13 $ 6.04 $ 5.99
Tangible book value$ 6.47 $ 6.34 $ 6.13 $ 6.04 $ 5.99
Performance Ratios:
Return on average assets 1.17% 1.26% 0.93% 0.85% 0.65%
Return on average equity 10.04% 11.63% 8.59% 7.68% 5.91%
Net interest margin, taxable equivalent 4.29% 4.31% 4.22% 4.09% 4.07%
Average cost of funds 0.21% 0.21% 0.21% 0.21% 0.22%
Average yield on loans 5.45% 5.42% 5.30% 5.18% 5.33%
Efficiency ratio 65.79% 55.21% 62.77% 71.15% 82.03%
Non-interest income to total revenue 18.47% 30.02% 24.38% 27.77% 24.14%
Capital & Liquidity:
Total equity to total assets (EOP) 11.61% 11.43% 10.60% 10.80% 11.08%
Tangible equity to tangible assets 11.61% 11.43% 10.60% 10.80% 11.08%
Total loans to total deposits 78.07% 78.00% 78.83% 74.50% 75.01%
Mohave State Bank
Common equity tier 1 ratio 0.00% 14.10% 12.71% 13.36%
Tier 1 leverage ratio 0.00% 10.83% 10.72% 10.92% 10.39%
Tier 1 risk based capital 0.00% 14.10% 12.71% 13.36% 13.70%
Total risk based capital 0.00% 15.27% 13.77% 14.52% 14.93%
Asset Quality:
Gross charge-offs$ 4 $ 373 $ 449 $ 124 $ 351
Net charge-offs (NCOs)$ (65)$ 370 $ 415 $ 30 $ 313
NCO to average loans, annualized -0.12% 0.63% 0.73% 0.06% 0.60%
Non-accrual loans$ 2,154 $ 4,570 $ 3,732 $ 6,444 $ 5,522
Other real estate owned$ 4,246 $ 6,141 $ 6,696 $ 7,595 $ 9,307
Repossessed assets $ - $ - $ - $ - $ -
Non-performing assets (NPAs)$ 6,400 $ 10,711 $ 10,428 $ 14,039 $ 14,829
NPAs to total assets 1.97% 3.29% 3.08% 4.28% 4.67%
Loans >90 days past due$ - $ - $ - $ - $ -
NPAs + 90 days past due$ 6,400 $ 10,711 $ 10,428 $ 14,039 $ 14,829
NPAs + loans 90 days past due to total assets 1.97% 3.29% 3.08% 4.28% 4.67%
Allowance for loan losses to total loans 1.40% 1.37% 1.26% 1.42% 1.42%
Allowance for loan losses to NPAs 48.27% 28.23% 28.47% 21.61% 19.92%
Period End Balances:
Assets$ 325,319 $ 325,104 $ 339,109 $ 328,302 $ 316,785
Total Loans (before reserves)$ 220,814 $ 220,768 $ 241,666 $ 217,245 $ 210,312
Deposits$ 282,836 $ 283,035 $ 297,928 $ 287,237 $ 277,493
Stockholders' equity$ 37,783 $ 37,166 $ 35,951 $ 35,470 $ 35,137
Common stock market capitalization$ 36,981 35,166 27,873 29,575 29,340
Full-time equivalent employees 77 76 81 81 80
Shares outstanding 5,842,145 5,861,000 5,868,038 5,868,038 5,868,038
Average Balances:
Assets$ 323,157 $ 337,463 $ 333,387 $ 319,817 $ 318,835
Earning assets$ 294,500 $ 307,376 $ 301,427 $ 285,722 $ 283,657
Total Loans (before reserves)$ 221,705 $ 235,051 $ 228,847 $ 214,992 $ 207,130
Deposits$ 280,558 $ 295,327 $ 291,980 $ 279,305 $ 277,947
Other borrowings$ 3,846 $ 4,327 $ 4,817 $ 4,481 $ 4,481
Stockholders' equity$ 37,686 36,689 35,947 35,454 34,975
Shares outstanding, basic - wtd 5,849,444 5,866,038 5,868,038 5,868,038 5,868,038
Shares outstanding, diluted - wtd 5,849,444 5,866,038 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.