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State Bank Financial Corporation Reports First Quarter 2016 Financial Results

  • First quarter 2016 net income of $10.8 million, or $.29 per diluted share
  • $104 million of loan growth
  • Solid growth in noninterest income continues
  • Announced transaction with NBG Bancorp, Inc. subsequent to quarter-end

ATLANTA, April 28, 2016 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the quarter ended March 31, 2016. Net income for the first quarter of 2016 was $10.8 million, compared to $9.2 million in the first quarter of 2015 and $12.1 million in the fourth quarter of 2015. Fully diluted earnings per share were $.29 in the first quarter of 2016 compared to $.26 in the first quarter of 2015 and $.33 in the fourth quarter of 2015. Higher noninterest income and lower expenses offset lower net interest income, which declined primarily due to lower accretion income in the quarter.

On April 5, 2016, State Bank Financial announced the signing of a definitive agreement to acquire NBG Bancorp, Inc. and its wholly-owned subsidiary, The National Bank of Georgia, in a cash and stock transaction with a purchase price of approximately $68 million, or $45.45 per share. At March 31, 2016, The National Bank of Georgia had assets of approximately $407 million, loans of approximately $330 million, deposits of approximately $314 million, a branch and mortgage office in Athens, and a branch office in Gainesville, Georgia. The completion of the transaction is subject to receipt of regulatory approvals and satisfaction of other customary closing conditions, including approval of NBG Bancorp shareholders.

Additionally, on April 20, 2016, State Bank announced the addition of an SBA lending team, which will expand its government guaranteed lending program with a focus on providing greater geographic and industry diversification.

Joe Evans, Chairman and CEO of State Bank Financial, commented, "We are off to a great start in 2016. Our announced acquisition of The National Bank of Georgia and expansion of our SBA lending team, combined with solid operating fundamentals and impressive organic loan growth, reflect continued positive momentum on all of our strategic priorities."

Operating Highlights

Net interest income of $36.6 million in the first quarter of 2016 decreased from $40.6 million in the fourth quarter of 2015 and $39.1 million in the first quarter of 2015 primarily due to lower accretion income on loans. Interest income on loans and invested funds, excluding purchased credit impaired loans, for the first quarter of 2016 was $29.0 million, a $618,000 increase from the prior quarter and a $4.0 million increase from the first quarter of 2015. Accretion income on loans was $9.7 million in the first quarter of 2016, down from $14.2 million in the fourth quarter of 2015 and $16.1 million in the first quarter of 2015. Accretion income in the fourth quarter of 2015 and first quarter of 2015 included $4.1 million and $2.6 million, respectively, in gains from loan pool closings. Comparatively, there were no loan pool closings during the first quarter of 2016. As of March 31, 2016, approximately $86 million of accretable discount remains to be recognized as loan accretion income.

Tom Wiley, Vice Chairman and President, commented, "Financial results for the first quarter highlight tangible progress on all fronts. Fee income benefited from record performance in our payroll division, as well as solid quarters from our mortgage and SBA businesses. Loan growth approached $100 million while maintaining excellent credit metrics. We also demonstrated disciplined management of noninterest expenses, which on a linked-quarter basis were down nearly $2 million excluding OREO-related expenses. Looking forward, The National Bank of Georgia transaction and the hiring of a well-known and seasoned SBA lending team are aligned with our strategic priorities, and we believe both will meaningfully contribute to our future results."

Noninterest income, excluding amortization of the FDIC receivable, was $9.4 million in the first quarter of 2016, up from $8.1 million in the fourth quarter of 2015, but down from $10.3 million in the first quarter of 2015, which benefited from $2.0 million in prepayment fees. Excluding prepayment fees, noninterest income increased compared to the previous quarter and previous year periods due to higher mortgage banking and SBA income as a result of increased production volumes, as well as higher payroll fee income.

Total noninterest expense for the first quarter of 2016 was $28.9 million, a $664,000 decrease from the fourth quarter of 2015 and a $1.2 million decrease from the first quarter of 2015. The linked-quarter decrease was due primarily to lower salary and employee benefit costs, which declined $1.2 million from the previous quarter. Operating expense, excluding loan collection and OREO costs, declined $1.8 million from the previous quarter and $767,000 from the first quarter of 2015.

Financial Condition

Total assets at March 31, 2016 were $3.53 billion, up from $3.47 billion at December 31, 2015. Period-end organic and purchased non-credit impaired loans increased to $2.1 billion at March 31, 2016, a net increase of $104.1 million from the fourth quarter of 2015. Purchased credit impaired loans decreased to $139.8 million at the end of the first quarter of 2016, a $5.8 million linked-quarter decline. Total loans were $2.3 billion at March 31, 2016, up $98.3 million from the fourth quarter of 2015. During the first quarter of 2016, certain investment securities were reclassified from available-for-sale to held-to-maturity in order to minimize the impact of future interest rate changes on accumulated other comprehensive income/loss. This reclassification will remain in effect until the investments are called or mature.

Total deposits at March 31, 2016 were $2.91 billion, up from $2.86 billion at the end of the fourth quarter of 2015. Period-end transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $16.2 million from the fourth quarter of 2015, as $65.3 million in growth in noninterest-bearing demand deposits was partially offset by a $49.1 million decline in interest-bearing transaction accounts. Noninterest-bearing demand deposits represented 30.7% of total deposits as of March 31, 2016. Average noninterest-bearing demand deposits increased $35.8 million from the fourth quarter of 2015, the 16th consecutive quarterly increase.

Tangible book value per share was $13.49 at the end of the first quarter of 2016. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 14.59% and a Tier I risk-based capital ratio of 17.09%.

Detailed Results

Supplemental tables displaying financial results for the first quarter of 2016 and the previous four quarters 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 1Q16 Financial Supplement: Table 7, 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: 1.800.698.4476

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 $3.5 billion in assets as of March 31, 2016, 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, statements regarding our belief that we can maintain continued positive momentum on our strategic priorities, statements about expanding the SBA lending team and its ability to meaningfully contribute to future results, and statements regarding the merger with NBG Bancorp, Inc. Such forward-looking statements are subject to risks, uncertainties, and other factors, such as our failure to integrate the new SBA lending team into our current SBA business as expected and their inability to transition their current clients to our platform, a downturn in the economy, the inability to obtain the requisite regulatory and shareholder approvals for the proposed transaction with NBG Bancorp and meet other closing terms and conditions, the reaction to the transaction of each bank’s customers, employees and counterparties, or difficulties related to the transition of services, volatile credit and financial markets both domestic and foreign, potential deterioration in real estate values, regulatory changes and excessive loan losses, as well as additional risks and uncertainties contained in the “Risk Factors” and forward-looking statements disclosure contained in State Bank Financial’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, 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.

Additional Information About the Merger and Where to Find It

In connection with the proposed merger transaction, State Bank Financial will file a registration statement on Form S-4 with the SEC to register State Bank Financial’s shares that will be issued to NBG Bancorp, Inc.’s shareholders in connection with the transaction. The registration statement will include a proxy statement of NBG Bancorp, Inc. and a prospectus of State Bank Financial, as well as other relevant documents concerning the proposed transaction. The registration statement and the proxy statement/prospectus to be filed with the SEC related to the proposed transaction will contain important information about State Bank Financial, NBG Bancorp, Inc. and the proposed transaction and related matters. WE URGE SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT AND PROXY/PROSPECTUS WHEN IT BECOMES AVAILABLE (AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE INTO THE REGISTRATION STATEMENT AND PROXY/PROSPECTUS) BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION. Security holders may obtain free copies of these documents and other documents filed with the SEC on the SEC’s website at http://www.sec.gov. Security holders may also obtain free copies of the documents filed with the SEC by State Bank Financial at its website at https://www.statebt.com (which website is not incorporated herein by reference) or by contacting Jeremy Lucas by telephone at 404.239.8626.

State Bank Financial and their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of NBG Bancorp, Inc. in connection with the proposed merger. Information regarding these persons who may, under the rules of the SEC, be considered participants in the solicitation of shareholders in connection with the proposed merger will be provided in the proxy statement/prospectus described above when it is filed with the SEC. Additional information regarding State Bank Financial’s directors and executive officers is included in State Bank Financial’s definitive proxy statement for 2016, which was filed with the SEC on April 15, 2016. You can obtain free copies of this document from State Bank Financial using the contact information above.

State Bank Financial Corporation
1Q16 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
1Q16 change vs
(Dollars in thousands, except per share amounts; taxable equivalent) 1Q16 4Q15 3Q15 2Q15 1Q15 4Q15 1Q15
Income Statement Highlights
Interest income on loans $24,507 $24,392 $24,397 $23,174 $21,498 $115 $3,009
Accretion income on loans 9,743 14,240 11,156 8,365 16,069 (4,497) (6,326)
Interest income on invested funds 4,675 4,142 4,054 4,037 3,629 533 1,046
Total interest income (1) 38,925 42,774 39,607 35,576 41,196 (3,849) (2,271)
Interest expense 2,113 1,994 1,977 1,972 1,979 119 134
Net interest income (1) 36,812 40,780 37,630 33,604 39,217 (3,968) (2,405)
Provision for loan and lease losses (134) 494 (265) 64 3,193 (628) (3,327)
Adjusted amortization of FDIC receivable for loss share agreements (1) (3) (492) (1,448) 1,448
Other noninterest income (4) 9,391 8,128 8,894 9,319 10,250 1,263 (859)
Total operating noninterest income (1) (3) 9,391 8,128 8,894 8,827 8,802 1,263 589
Operating noninterest expense (1) (5) 28,898 29,562 28,687 30,038 29,585 (664) (687)
Operating income before taxes (1) (3) (5) 17,439 18,852 18,102 12,329 15,241 (1,413) 2,198
Operating income tax expense (1) (6) 6,601 6,731 6,696 4,620 5,729 (130) 872
Operating income (1) (7) 10,838 12,121 11,406 7,709 9,512 (1,283) 1,326
Loss share termination, net of tax benefit (8,921)
Severance costs, net of tax benefit (1,847) (272) (224) 224
Merger-related expenses, net of tax benefit (440) (537) (84) 84
Net income (loss) available to common shareholders $10,838 $12,121 $9,119 $(2,021) $9,204 $(1,283) $1,634
Common Share Data
Basic net income (loss) per share $.29 $.33 $.26 $(.06) $.27 $(.04) $.02
Diluted net income (loss) per share .29 .33 .25 (.06) .26 (.04) .03
Basic operating income per share (1) .29 .33 .32 .22 .28 (.04) .01
Diluted operating income per share (1) .29 .33 .31 .21 .27 (.04) .02
Cash dividends declared per share .14 .14 .07 .06 .05 .09
Book value per share 14.73 14.47 14.88 14.62 14.81 .26 (.08)
Tangible book value per share (1) 13.49 13.22 13.78 13.51 13.70 .27 (.21)
Market price per share (quarter end) 19.76 21.03 20.68 21.70 21.00 (1.27) (1.24)
Common Shares Outstanding
Common stock 37,052,008 37,077,848 35,753,855 35,763,791 35,738,850 (25,840) 1,313,158
Weighted average shares outstanding:
Basic 36,092,269 35,208,607 34,687,354 34,654,689 33,593,687 883,662 2,498,582
Diluted (8) 36,187,662 36,140,474 36,003,068 34,654,689 34,862,324 47,188 1,325,338
Average Balance Sheet Highlights
Loans $2,250,518 $2,203,993 $2,136,746 $2,099,798 $1,986,008 $46,525 $264,510
Assets 3,476,646 3,455,342 3,344,023 3,316,424 3,323,713 21,304 152,933
Deposits 2,854,514 2,842,788 2,766,314 2,746,818 2,716,084 11,726 138,430
Liabilities 79,688 77,852 48,211 44,347 82,361 1,836 (2,673)
Equity 542,444 534,702 529,498 525,259 525,268 7,742 17,176
Tangible common equity 496,287 491,346 489,757 485,337 485,087 4,941 11,200


State Bank Financial Corporation
1Q16 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
1Q16 change vs
(Dollars in thousands, except per share amounts; taxable equivalent) 1Q16 4Q15 3Q15 2Q15 1Q15 4Q15 1Q15
Key Metrics (2)
Operating return on average assets (1) (7) 1.25% 1.39% 1.35% .93% 1.16% (.14)% .09%
Operating return on average equity (1) (7) 8.04 8.99 8.55 5.89 7.34 (.95) .70
Return on average assets 1.25 1.39 1.08 (.24) 1.12 (.14) .13
Return on average equity 8.04 8.99 6.83 (1.54) 7.11 (.95) .93
Yield on earning assets 4.79 5.23 4.98 4.58 5.37 (.44) (.58)
Cost of funds .29 .28 .28 .29 .29 .01
Rate on interest-bearing liabilities .42 .39 .40 .39 .38 .03 .04
Net interest margin 4.53 4.99 4.73 4.33 5.11 (.46) (.58)
Net interest margin excluding accretion income (9) 3.48 3.40 3.52 3.45 3.22 .08 .26
Average tangible equity to average tangible assets (1) 14.47 14.40 14.82 14.81 14.77 .07 (.30)
Leverage ratio (10) 14.59 14.48 14.93 14.92 15.00 .11 (.41)
Tier I risk-based capital ratio (10) 17.09 17.71 18.20 19.12 19.51 (.62) (2.42)
Total risk-based capital ratio (10) 18.13 18.75 19.28 20.28 20.70 (.62) (2.57)
Operating efficiency ratio (1) (3) (5) 62.55 60.44 61.66 70.79 61.61 2.11 .94
Average loans to average deposits 78.84 77.53 77.24 76.44 73.12 1.31 5.72
Noninterest-bearing deposits to total deposits 30.68 28.87 29.45 27.85 24.91 1.81 5.77
(1) Non-GAAP financial measure. See Condensed Operating Results to GAAP Earnings Reconciliation (Table 7) 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 $14.5 million in the second quarter of 2015.
(4) Includes all line items of noninterest income other than amortization of FDIC receivable for loss share agreements.
(5) Excludes severance costs and merger-related expenses.
(6) Adjusted for income tax effect of taxable equivalent adjustments on interest income, the one-time loss share expense termination charge, severance costs and merger-related expenses.
(7) Excludes the one-time loss share expense termination charge, severance costs and merger-related expenses, 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.
(10) Current period capital ratios are estimated as of the date of this earnings release.


State Bank Financial Corporation
1Q16 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
1Q16 change vs
(Dollars in thousands) 1Q16 4Q15 3Q15 2Q15 1Q15 4Q15 1Q15
Assets
Cash and amounts due from depository institutions $14,398 $12,175 $15,734 $21,903 $20,426 $2,223 $(6,028)
Interest-bearing deposits in other financial institutions 102,355 163,187 153,937 179,831 285,971 (60,832) (183,616)
Cash and cash equivalents 116,753 175,362 169,671 201,734 306,397 (58,609) (189,644)
Investment securities available-for-sale 849,576 887,705 831,548 815,277 819,609 (38,129) 29,967
Investment securities held-to-maturity 60,591 60,591 60,591
Loans 2,258,533 2,160,217 2,139,691 2,042,186 2,000,189 98,316 258,344
Allowance for loan and lease losses (30,345) (29,075) (28,930) (29,569) (29,982) (1,270) (363)
Loans, net 2,228,188 2,131,142 2,110,761 2,012,617 1,970,207 97,046 257,981
Loans held-for-sale 55,219 54,933 59,563 64,047 45,211 286 10,008
Other real estate owned 11,590 10,530 11,363 15,055 16,848 1,060 (5,258)
Premises and equipment, net 42,802 42,980 43,982 45,608 46,370 (178) (3,568)
Goodwill 36,357 36,357 31,049 31,049 30,510 5,847
Other intangibles, net 9,556 10,101 8,486 8,922 9,045 (545) 511
SBA servicing rights 2,882 2,626 2,463 2,185 1,902 256 980
FDIC receivable for loss share agreements 17,098 (17,098)
Bank-owned life insurance 59,281 58,819 58,347 57,810 57,348 462 1,933
Other assets 60,176 59,512 61,440 46,004 31,363 664 28,813
Total assets $3,532,971 $3,470,067 $3,388,673 $3,300,308 $3,351,908 $62,904 $181,063
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits $891,511 $826,216 $823,146 $762,100 $691,938 $65,295 $199,573
Interest-bearing deposits 2,014,087 2,035,746 1,972,042 1,974,185 2,085,997 (21,659) (71,910)
Total deposits 2,905,598 2,861,962 2,795,188 2,736,285 2,777,935 43,636 127,663
Securities sold under agreements to repurchase 33,503 32,179 4,872 11,747 8,250 1,324 25,253
Notes payable 1,808 1,812 2,761 2,765 2,769 (4) (961)
Other liabilities 46,207 37,624 53,691 26,527 33,708 8,583 12,499
Total liabilities 2,987,116 2,933,577 2,856,512 2,777,324 2,822,662 53,539 164,454
Total shareholders’ equity 545,855 536,490 532,161 522,984 529,246 9,365 16,609
Total liabilities and shareholders’ equity $3,532,971 $3,470,067 $3,388,673 $3,300,308 $3,351,908 $62,904 $181,063
Capital Ratios (1)
Average equity to average assets 15.60% 15.47% 15.83% 15.84% 15.80% .13% (.20)%
Leverage ratio 14.59 14.48 14.93 14.92 15.00 .11 (.41)
CET1 risk-based capital ratio 17.09 17.71 18.20 19.12 19.51 (.62) (2.42)
Tier I risk-based capital ratio 17.09 17.71 18.20 19.12 19.51 (.62) (2.42)
Total risk-based capital ratio 18.13 18.75 19.28 20.28 20.70 (.62) (2.57)
(1) Current period capital ratios are estimated as of the date of this earning release.


State Bank Financial Corporation
1Q16 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
1Q16 change vs
(Dollars in thousands, except per share amounts) 1Q16 4Q15 3Q15 2Q15 1Q15 4Q15 1Q15
Net Interest Income:
Interest income on loans $24,342 $24,258 $24,218 $23,070 $21,400 $84 $2,942
Accretion income on loans 9,743 14,240 11,156 8,365 16,069 (4,497) (6,326)
Interest income on invested funds 4,673 4,139 4,050 4,032 3,602 534 1,071
Interest expense 2,113 1,994 1,977 1,972 1,979 119 134
Net interest income 36,645 40,643 37,447 33,495 39,092 (3,998) (2,447)
Provision for loan and lease losses (134) 494 (265) 64 3,193 (628) (3,327)
Net interest income after provision for loan and lease losses 36,779 40,149 37,712 33,431 35,899 (3,370) 880
Noninterest Income:
Amortization of FDIC receivable for loss share agreements (15,040) (1,448) 1,448
Service charges on deposits 1,386 1,495 1,491 1,501 1,489 (109) (103)
Mortgage banking income 3,041 2,011 3,079 3,480 2,680 1,030 361
Payroll fee income 1,327 1,165 1,004 956 1,158 162 169
SBA income 1,502 1,316 1,720 1,380 1,123 186 379
ATM income 745 741 742 773 725 4 20
Bank-owned life insurance income 462 472 537 462 455 (10) 7
Gain (loss) on sale of investment securities 13 16 17 (59) 380 (3) (367)
Other 915 912 304 826 2,240 3 (1,325)
Total noninterest income 9,391 8,128 8,894 (5,721) 8,802 1,263 589
Noninterest Expense:
Salaries and employee benefits 18,760 19,914 23,293 20,506 19,582 (1,154) (822)
Occupancy and equipment 3,101 2,995 3,113 3,219 3,105 106 (4)
Data processing 2,075 2,378 2,097 2,435 2,280 (303) (205)
Legal and professional fees 991 1,159 1,144 1,284 1,484 (168) (493)
Merger-related expenses 717 876 137 (137)
Marketing 502 792 491 599 436 (290) 66
Federal deposit insurance premiums and other regulatory fees 562 518 621 455 506 44 56
Loan collection and OREO costs 485 (690) (1,198) (114) 405 1,175 80
Amortization of intangibles 545 509 436 442 417 36 128
Other 1,877 1,987 1,702 1,655 1,735 (110) 142
Total noninterest expense 28,898 29,562 32,416 31,357 30,087 (664) (1,189)
Income (Loss) Before Income Taxes 17,272 18,715 14,190 (3,647) 14,614 (1,443) 2,658
Income tax expense (benefit) 6,434 6,594 5,071 (1,626) 5,410 (160) 1,024
Net Income (Loss) $10,838 $12,121 $9,119 $(2,021) $9,204 $(1,283) $1,634
Net Income (Loss) Per Share
Basic $.29 $.33 $.26 $(.06) $.27 $(.04) $.02
Diluted .29 .33 .25 (.06) .26 (.04) .03
Weighted Average Shares Outstanding
Basic 36,092,269 35,208,607 34,687,354 34,654,689 33,593,687 883,662 2,498,582
Diluted 36,187,662 36,140,474 36,003,068 34,654,689 34,862,324 47,188 1,325,338


State Bank Financial Corporation
1Q16 Financial Supplement: Table 4
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
1Q16 change vs
(Dollars in thousands) 1Q16 4Q15 3Q15 2Q15 1Q15 4Q15 1Q15
Composition of Loans
Organic loans (1):
Construction, land & land development $452,654 $482,087 $412,788 $399,982 $388,148 $(29,433) $64,506
Other commercial real estate 719,340 661,062 705,616 634,943 606,347 58,278 112,993
Total commercial real estate 1,171,994 1,143,149 1,118,404 1,034,925 994,495 28,845 177,499
Residential real estate 140,493 140,613 127,823 118,612 107,554 (120) 32,939
Owner-occupied real estate 222,347 219,636 212,171 205,805 191,557 2,711 30,790
Commercial, financial & agricultural 249,192 181,513 165,305 126,157 108,929 67,679 140,263
Leases 93,490 71,539 54,814 26,709 21,491 21,951 71,999
Consumer 17,824 17,882 16,432 12,078 9,442 (58) 8,382
Total organic loans 1,895,340 1,774,332 1,694,949 1,524,286 1,433,468 121,008 461,872
Purchased non-credit impaired loans(2):
Construction, land & land development 13,959 18,598 37,326 61,089 67,129 (4,639) (53,170)
Other commercial real estate 70,444 74,506 79,878 91,212 94,917 (4,062) (24,473)
Total commercial real estate 84,403 93,104 117,204 152,301 162,046 (8,701) (77,643)
Residential real estate 65,948 69,053 75,987 82,668 88,871 (3,105) (22,923)
Owner-occupied real estate 57,519 61,313 69,619 73,409 77,946 (3,794) (20,427)
Commercial, financial & agricultural 13,315 14,216 19,529 28,656 42,494 (901) (29,179)
Consumer 2,213 2,624 3,080 3,505 4,517 (411) (2,304)
Total purchased non-credit impaired loans 223,398 240,310 285,419 340,539 375,874 (16,912) (152,476)
Purchased credit impaired loans (3):
Construction, land & land development 13,245 14,252 16,473 20,002 18,791 (1,007) (5,546)
Other commercial real estate 40,119 40,742 42,637 48,187 54,211 (623) (14,092)
Total commercial real estate 53,364 54,994 59,110 68,189 73,002 (1,630) (19,638)
Residential real estate 60,579 64,011 67,218 70,537 74,876 (3,432) (14,297)
Owner-occupied real estate 24,834 25,364 30,655 35,036 39,210 (530) (14,376)
Commercial, financial & agricultural 871 1,050 2,132 3,234 3,427 (179) (2,556)
Consumer 147 156 208 365 332 (9) (185)
Total purchased credit impaired loans 139,795 145,575 159,323 177,361 190,847 (5,780) (51,052)
Total loans $2,258,533 $2,160,217 $2,139,691 $2,042,186 $2,000,189 $98,316 $258,344
Composition of Deposits
Noninterest-bearing demand deposits $891,511 $826,216 $823,146 $762,100 $691,938 $65,295 $199,573
Interest-bearing transaction accounts 539,322 588,391 499,434 497,715 562,378 (49,069) (23,056)
Savings and money market deposits 1,017,930 1,074,190 1,059,770 1,038,292 1,052,677 (56,260) (34,747)
Time deposits less than $250,000 348,304 279,449 289,815 301,431 319,118 68,855 29,186
Time deposits $250,000 or greater 64,494 41,439 56,750 59,105 58,076 23,055 6,418
Brokered and wholesale time deposits 44,037 52,277 66,273 77,642 93,748 (8,240) (49,711)
Total deposits $2,905,598 $2,861,962 $2,795,188 $2,736,285 $2,777,935 $43,636 $127,663
(1) Loans originated by State Bank and Trust Company.
(2) Consists of loans purchased through the Bank of Atlanta and First Bank of Georgia 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
1Q16 Financial Supplement: Table 5
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
1Q16 change vs
(Dollars in thousands) 1Q16 4Q15 3Q15 2Q15 1Q15 4Q15 1Q15
Allowance for loan and lease losses on organic loans
Beginning Balance $21,224 $20,176 $19,594 $19,424 $18,392 $1,048 $2,832
Charge-offs (240) (110) (63) (64) (76) (130) (164)
Recoveries 96 207 31 12 38 (111) 58
Net (charge-offs) recoveries (144) 97 (32) (52) (38) (241) (106)
Provision for loan and lease losses 1,546 951 614 222 1,070 595 476
Ending Balance $22,626 $21,224 $20,176 $19,594 $19,424 $1,402 $3,202
Allowance for loan and lease losses on purchased non-credit impaired loans
Beginning Balance $53 $ $ $ $ $53 $53
Charge-offs (63) (46) (2) (63) (61)
Recoveries 33 1 6 32 33
Net (charge-offs) recoveries (30) 1 6 (46) (2) (31) (28)
Provision for loan and lease losses 143 52 (6) 46 2 91 141
Ending Balance $166 $53 $ $ $ $113 $166
Allowance for loan and lease losses on purchased credit impaired loans
Beginning Balance $7,798 $8,754 $9,975 $10,558 $10,246 $(956) $(2,448)
Charge-offs (1,516) (3,467) (3,282) (2,155) (3,229) 1,951 1,713
Recoveries 3,094 3,020 2,934 1,227 924 74 2,170
Net (charge-offs) recoveries 1,578 (447) (348) (928) (2,305) 2,025 3,883
Provision for loan and lease losses (1) (1,823) (509) (873) 345 2,617 (1,314) (4,440)
Ending Balance $7,553 $7,798 $8,754 $9,975 $10,558 $(245) $(3,005)
Nonperforming organic assets
Nonaccrual loans $9,416 $5,096 $5,117 $4,971 $4,802 $4,320 $4,614
Total nonperforming organic loans 9,416 5,096 5,117 4,971 4,802 4,320 4,614
Other real estate owned 33 33 500 160 33
Total nonperforming organic assets $9,449 $5,129 $5,617 $5,131 $4,802 $4,320 $4,647
Nonperforming purchased non-credit impaired assets
Nonaccrual loans $1,705 $1,280 $1,639 $232 $163 $425 $1,542
Accruing TDRs 923 577 346 923
Total nonperforming PNCI loans 2,628 1,857 1,639 232 163 771 2,465
Other real estate owned 22 22 22
Total nonperforming PNCI assets $2,650 $1,857 $1,639 $232 $163 $793 $2,487
Ratios for organic assets
Annualized QTD charge-offs (recoveries) on organic loans to average organic loans .03% (.02)% .01% .01% .01% .05% .02%
Nonperforming organic loans to organic loans .50 .29 .30 .33 .33 .21 .17
Nonperforming organic assets to organic loans + OREO .50 .29 .33 .34 .33 .21 .17
Past due organic loans to organic loans .47 .10 .08 .08 .11 .37 .36
Allowance for loan and lease losses on organic loans to organic loans 1.19 1.20 1.19 1.29 1.36 (.01) (.17)
Ratios for purchased non-credit impaired loans
Annualized QTD charge-offs (recoveries) on PNCI loans to average PNCI loans .05% % (.01)% .04% % .05% .05%
Nonperforming PNCI loans to PNCI loans 1.18 .77 .57 .07 .04 .41 1.14
Nonperforming PNCI assets to PNCI loans + OREO 1.19 .77 .57 .07 .04 .42 1.15
Past due PNCI loans to PNCI loans .30 .39 .64 .49 .36 (.09) (.06)
Allowance for loan and lease losses on PNCI loans to PNCI loans .07 .02 .05 .07
Ratios for purchased credit impaired loans (2)
Annualized QTD charge-offs (recoveries) on PCI loans to average PCI loans (4.50)% 1.20% .83% 2.07% 4.81% (5.70)% (9.31)%
Past due PCI loans to PCI loans 17.90 16.64 14.15 13.30 18.48 1.26 (.58)
Allowance for loan and lease losses on PCI loans to PCI loans 5.40 5.36 5.49 5.62 5.53 .04 (.13)
(1) Provision for loan and lease losses amount attributable to FDIC loss share agreements for purchased credit impaired loans was $0 for 1Q16, $0 for 4Q15, $0 for 3Q15, $(549,000) for 2Q15, and $(496,000) for 1Q15.
(2) 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
1Q16 Financial Supplement: Table 6
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
1Q16 change vs
(Dollars in thousands) 1Q16 4Q15 3Q15 2Q15 1Q15 4Q15 1Q15
Average Balances
Interest-bearing deposits in other financial institutions $126,289 $188,966 $179,526 $191,653 $320,248 (62,677) (193,959)
Investment securities 892,365 850,127 837,786 821,998 807,002 42,238 85,363
Loans, excluding purchased credit impaired (1) 2,109,449 2,055,933 1,969,651 1,920,219 1,791,537 53,516 317,912
Purchased credit impaired loans 141,069 148,060 167,095 179,579 194,471 (6,991) (53,402)
Total earning assets 3,269,172 3,243,086 3,154,058 3,113,449 3,113,258 26,086 155,914
Total nonearning assets 207,474 212,256 189,965 202,975 210,455 (4,782) (2,981)
Total assets 3,476,646 3,455,342 3,344,023 3,316,424 3,323,713 21,304 152,933
Interest-bearing transaction accounts 538,926 559,113 486,514 522,147 507,087 (20,187) 31,839
Savings & money market deposits 1,036,498 1,066,783 1,042,941 1,035,706 1,072,818 (30,285) (36,320)
Time deposits less than $250,000 314,950 283,276 295,304 309,725 327,807 31,674 (12,857)
Time deposits $250,000 or greater 53,786 50,784 57,511 57,375 56,529 3,002 (2,743)
Brokered and wholesale time deposits 48,039 56,298 70,004 82,840 103,464 (8,259) (55,425)
Other borrowings 33,635 26,106 15,507 11,667 27,742 7,529 5,893
Total interest-bearing liabilities 2,025,834 2,042,360 1,967,781 2,019,460 2,095,447 (16,526) (69,613)
Noninterest-bearing deposits 862,315 826,534 814,040 739,025 648,379 35,781 213,936
Other liabilities 46,053 51,746 32,704 32,680 54,619 (5,693) (8,566)
Shareholders’ equity 542,444 534,702 529,498 525,259 525,268 7,742 17,176
Total liabilities and shareholders' equity 3,476,646 3,455,342 3,344,023 3,316,424 3,323,713 21,304 152,933
Interest Margins (2)
Interest-bearing deposits in other financial institutions .38% .28% .27% .29% .27% .10% .11%
Investment securities, tax-equivalent basis (3) 2.05 1.87 1.86 1.90 1.72 .18 .33
Loans, excluding purchased credit impaired, tax-equivalent basis (4) 4.67 4.71 4.91 4.84 4.87 (.04) (.20)
Purchased credit impaired loans 27.78 38.16 26.49 18.68 33.51 (10.38) (5.73)
Total earning assets 4.79% 5.23% 4.98% 4.58% 5.37% (.44)% (.58)%
Interest-bearing transaction accounts .12 .13 .13 .14 .14 (.01) (.02)
Savings & money market deposits .50 .48 .47 .46 .45 .02 .05
Time deposits less than $250,000 .51 .39 .38 .36 .34 .12 .17
Time deposits $250,000 or greater .53 .33 .36 .36 .30 .20 .23
Brokered and wholesale time deposits 1.07 1.03 .97 .97 .94 .04 .13
Other borrowings .65 .76 1.69 2.23 .98 (.11) (.33)
Total interest-bearing liabilities .42% .39% .40% .39% .38% .03% .04%
Net interest spread 4.37% 4.84% 4.58% 4.19% 4.99% (.47)% (.62)%
Net interest margin 4.53% 4.99% 4.73% 4.33% 5.11% (.46)% (.58)%
Net interest margin excluding accretion income 3.48% 3.40% 3.52% 3.45% 3.22% .08% .26%
(1) Includes average nonaccrual loans of $8.9 million for 1Q16, $6.5 million for 4Q15, $5.9 million for 3Q15, $4.9 million for 2Q15, and $5.1 million for 1Q15.
(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 $2,000 for 1Q16, $3,000 for 4Q15, $4,000 for 3Q15, $5,000 for 2Q15, and $27,000 for 1Q15.
(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 $165,000 for 1Q16, $134,000 for 4Q15, $179,000 for 3Q15, $104,000 for 2Q15, and $98,000 for 1Q15.


State Bank Financial Corporation
1Q16 Financial Supplement: Table 7
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
(dollars in thousands, except per share amounts; taxable equivalent)1Q16 4Q15 3Q15 2Q15 1Q15
Interest income reconciliation
Interest income - taxable equivalent$38,925 $42,774 $39,607 $35,576 $41,196
Taxable equivalent adjustment(167) (137) (183) (109) (125)
Interest income (GAAP)$38,758 $42,637 $39,424 $35,467 $41,071
Net interest income reconciliation
Net interest income - taxable equivalent$36,812 $40,780 $37,630 $33,604 $39,217
Taxable equivalent adjustment(167) (137) (183) (109) (125)
Net interest income (GAAP)$36,645 $40,643 $37,447 $33,495 $39,092
Adjusted amortization of FDIC receivable for loss share agreements
Adjusted amortization of FDIC receivable for loss share agreements$ $ $ $(492) $(1,448)
Loss share termination (14,548)
Amortization of FDIC receivable for loss share agreements (GAAP)$ $ $ $(15,040) $(1,448)
Operating noninterest income reconciliation
Operating noninterest income$9,391 $8,128 $8,894 $8,827 $8,802
Loss share termination (14,548)
Total noninterest income (GAAP)$9,391 $8,128 $8,894 $(5,721) $8,802
Operating noninterest expense reconciliation
Operating noninterest expense$28,898 $29,562 $28,687 $30,038 $29,585
Merger-related expenses 717 876 137
Severance costs 3,012 443 365
Total noninterest expense (GAAP)$28,898 $29,562 $32,416 $31,357 $30,087
Operating income before taxes reconciliation
Operating income before taxes$17,439 $18,852 $18,102 $12,329 $15,241
Loss share termination (14,548)
Merger-related expenses (717) (876) (137)
Severance costs (3,012) (443) (365)
Taxable equivalent adjustment to interest income(167) (137) (183) (109) (125)
Income (loss) before taxes (GAAP)$17,272 $18,715 $14,190 $(3,647) $14,614
State Bank Financial Corporation
1Q16 Financial Supplement: Table 7 (continued)
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
(dollars in thousands, except per share amounts; taxable equivalent)1Q16 4Q15 3Q15 2Q15 1Q15
Operating income tax reconciliation
Operating income tax expense$6,601 $6,731 $6,696 $4,620 $5,729
Loss share termination tax benefit (5,627)
Merger-related expenses tax benefit (277) (339) (53)
Severance costs tax benefit (1,165) (171) (141)
Taxable equivalent adjustment to interest income(167) (137) (183) (109) (125)
Income tax expense (GAAP)$6,434 $6,594 $5,071 $(1,626) $5,410
Operating income reconciliation
Operating income$10,838 $12,121 $11,406 $7,709 $9,512
Loss share termination, net of tax benefit (8,921)
Merger-related expenses, net of tax benefit (440) (537) (84)
Severance costs, net of tax benefit (1,847) (272) (224)
Net income (GAAP)$10,838 $12,121 $9,119 $(2,021) $9,204
Book value per common share reconciliation
Tangible book value per common share$13.49 $13.22 $13.78 $13.51 $13.70
Effect of goodwill and other intangibles1.24 1.25 1.10 1.11 1.11
Book value per common share (GAAP)$14.73 $14.47 $14.88 $14.62 $14.81
Average equity to average assets reconciliation
Average tangible equity to average tangible assets14.47% 14.40% 14.82% 14.81% 14.77%
Effect of average goodwill and other intangibles1.13 1.07 1.01 1.03 1.03
Average equity to average assets (GAAP)15.60% 15.47% 15.83% 15.84% 15.80%
Basic operating income per share reconciliation
Basic operating income per share$.29 $.33 $.32 $.22 $.28
Effect of non-operating items (.06) (.28) (.01)
Basic net income (loss) per share (GAAP)$.29 $.33 $.26 $(.06) $.27
State Bank Financial Corporation
1Q16 Financial Supplement: Table 7 (continued)
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
(dollars in thousands, except per share amounts; taxable equivalent)1Q16 4Q15 3Q15 2Q15 1Q15
Diluted operating income per share reconciliation
Diluted operating income per share$.29 $.33 $.31 $.21 $.27
Effect of non-operating items (.06) (.27) (.01)
Diluted net income (loss) per share (GAAP)$.29 $.33 $.25 $(.06) $.26
Operating return on average assets reconciliation
Operating return on average assets1.25% 1.39% 1.35% .93% 1.16%
Effect of non-operating items% % (.27)% (1.17)% (.04)%
Return on average assets (GAAP)1.25% 1.39% 1.08% (.24)% 1.12%
Operating return on average equity reconciliation
Operating return on average equity8.04% 8.99% 8.55% 5.89% 7.34%
Effect of non-operating items% % (1.72)% (7.43)% (.23)%
Return on average equity (GAAP)8.04% 8.99% 6.83% (1.54)% 7.11%
Efficiency ratio reconciliation
Operating efficiency ratio62.55% 60.44% 61.66% 70.79% 61.61%
Effect of tax equivalent adjustment to interest income, loss share termination, merger-related expenses, and severance costs.22% .17 8.29 42.11 1.21
Efficiency ratio (GAAP)62.77% 60.61% 69.95% 112.90% 62.82%
(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, other noninterest income, total operating noninterest income, operating noninterest expense, operating income before taxes - taxable equivalent, operating income tax expense, operating income, tangible book value per common share, tangible average equity to average assets, basic operating earnings per share, diluted operating earnings per share, operating return on average assets, operating return on average equity, operating efficiency ratio and average tangible equity to average tangible assets. 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.

Investor Relations Contact: Jeremy Lucas 404.239.8626 / jeremy.lucas@statebt.com

Source:State Bank Financial Corporation