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State Bank Financial Corporation Reports Second Quarter 2016 Financial Results

  • Second quarter 2016 net income of $13.8 million, or $.37 per diluted share
  • Total loans increased $87 million, or 15% annualized
  • Continued growth in key noninterest income initiatives
  • Announced transaction with NBG Bancorp, Inc. in April and S Bankshares, Inc. in May

ATLANTA, July 28, 2016 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the quarter ended June 30, 2016. Net income for the second quarter of 2016 was $13.8 million, compared to $10.8 million in the first quarter of 2016 and a net loss of $2.0 million in the second quarter of 2015 related to one-time expenses associated with the early termination of loss share agreements in May 2015. Fully diluted earnings per share were $.37 in the second quarter of 2016 compared to $.29 in the first quarter of 2016 and a fully diluted loss per share of $.06 in the second quarter of 2015.

Driven by solid loan growth during the quarter, interest income on loans improved to $25.4 million in the second quarter of 2016, a $1.1 million increase from the first quarter of 2016 and a $2.3 million increase from the second quarter of 2015. Higher accretion income on loans due to a gain from a loan pool closing and an increase in noninterest income also contributed to strong financial results in the second quarter.

Joe Evans, Chairman and CEO of State Bank Financial, commented, "We had a great second quarter with $13.8 million of net income as we continue to generate capital and increase tangible book value for shareholders. Further, we announced two bank acquisitions in the quarter that will accelerate the growth of our core earnings and add three attractive MSAs to our footprint. I am very pleased with our performance thus far in 2016 and with the positive momentum we are carrying into the second half of the year."

Operating Highlights

Net interest income of $41.7 million in the second quarter of 2016 increased from $36.6 million in the first quarter of 2016 and $33.5 million in the second quarter of 2015 primarily due to higher interest and accretion income on loans. Accretion income on loans was $14.0 million in the second quarter of 2016, up from $9.7 million in the first quarter of 2016 and $8.4 million in the second quarter of 2015. Accretion income in the second quarter of 2016 was positively impacted by a $4.1 million gain from one loan pool closing. Comparatively, there were no loan pool closings during the first quarter of 2016. As of June 30, 2016, approximately $75 million of accretable discount remains to be recognized as loan accretion income.

Tom Wiley, Vice Chairman and President, commented, "Second quarter results demonstrated continued progress executing on our strategic priorities. Strong loan growth in the second quarter was complimented by our second highest noninterest income quarter ever, driven by outstanding results from mortgage, SBA, and Altera Payroll. The team is intensely focused on serving our clients’ needs and growing these fee income lines of business, which should benefit from adding scale to our existing platform."

Noninterest income was $10.2 million in the second quarter of 2016, up from $9.4 million in the first quarter of 2016 and $9.3 million in the second quarter of 2015, excluding amortization of the FDIC receivable. Growth in our key noninterest income initiatives continued in the second quarter of 2016, with income from mortgage banking increasing $510 thousand from the previous quarter to $3.6 million and SBA lending increasing $183 thousand from the previous quarter to $1.7 million. Payroll fee income of $1.1 million increased versus the prior year period, but decreased from the previous quarter due to what is typically a seasonally strong first quarter. Gain on sale of securities totaled $396 thousand in the second quarter of 2016.

Total noninterest expense for the second quarter of 2016 was $30.7 million, a $1.8 million increase from the first quarter of 2016, and a $683 thousand decrease from the second quarter of 2015. Salary and employee benefit costs increased $1.9 million from the previous quarter due to the addition of an SBA lending team in April, new hires in mortgage banking and Patriot Capital, higher commissions on production, and other seasonal factors. Merger-related expenses totaled $319 thousand in the second quarter of 2016.

Financial Condition

Total assets at June 30, 2016 were $3.59 billion, up from $3.53 billion at March 31, 2016. Total loans were $2.3 billion at June 30, 2016, up $86.6 million from the first quarter of 2016. Period-end organic and purchased non-credit impaired loans increased to $2.2 billion at June 30, 2016, a net increase of $91.8 million from the first quarter of 2016. Purchased credit impaired loans decreased to $134.5 million at the end of the second quarter of 2016, a $5.3 million linked-quarter decline.

Total deposits at June 30, 2016 were $2.89 billion, down from $2.91 billion at the end of the first quarter of 2016. Period-end transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, decreased $69.5 million from the first quarter of 2016 as a few large depositors reduced balances related to normal operating cycles of their business. Noninterest-bearing demand deposits represented 28.8% of total deposits as of June 30, 2016. Average noninterest-bearing demand deposits decreased $14.0 million from the first quarter of 2016.

The organic loan portfolio continued to perform well in the second quarter of 2016 as past due organic loans represented .18% of total organic loans. Net charge-offs were $2.3 million during the quarter, almost entirely related to one loan that was classified and assigned a specific reserve of $2.2 million in the first quarter of 2016. The allowance as a percent of loans declined nine basis points to 1.10% at the end of the second quarter of 2016 and covers organic nonperforming assets by over three times.

Tangible book value per share was $13.77 at the end of the second quarter of 2016. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 14.56% and a Tier I risk-based capital ratio of 16.68%.

Recent Transactions

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. At June 30, 2016, The National Bank of Georgia had assets of approximately $417 million, loans of approximately $342 million, deposits of approximately $322 million, a branch and mortgage office in Athens, and a branch office in Gainesville, Georgia. At a special meeting held on July 25, 2016, NBG Bancorp, Inc. received shareholder approval for the transaction. The completion of the transaction is subject to receipt of regulatory approvals and satisfaction of other customary closing conditions.

On May 19, 2016, State Bank Financial announced the signing of a definitive agreement to acquire S Bankshares, Inc. and its wholly-owned subsidiary, S Bank, in a cash and stock transaction with a purchase price of approximately $11 million. At June 30, 2016, S Bank had assets of approximately $109 million, loans of approximately $82 million, and deposits of approximately $91 million. S Bank has banking operations in Savannah, Glennville, Reidsville, and Hinesville, Georgia. The completion of the transaction is subject to receipt of regulatory approvals and satisfaction of other customary closing conditions, including approval of S Bankshares shareholders.

Detailed Results

Supplemental tables displaying financial results for the second quarter of 2016, the previous four quarters and the first half of 2016 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 2Q16 Financial Supplement: Table 8, Reconciliation of Non-GAAP Measures.

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: 1.800.686.5266

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 $3.6 billion in assets as of June 30, 2016, is an Atlanta-based bank holding company for State Bank and Trust Company. State Bank operates 25 full-service 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 in this press release and other information that we make publicly available from time to time are “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 have positive momentum to carry us into the second half of 2016, statements regarding our proposed mergers with NBG Bancorp, Inc. and S Bankshares, Inc., including our belief that these acquisitions will accelerate our core earnings and add attractive MSAs to our footprint, statements regarding our fee income lines of business, including that they should benefit from adding scale to our existing platform, and other statements regarding our strategic initiatives. Such forward-looking statements are subject to risks, uncertainties, and other factors, including a downturn in the economy, the inability to obtain the requisite regulatory approvals for the proposed transactions with NBG Bancorp and/or S Bankshares and the requisite shareholder approval for the proposed transaction with S Bankshares and meet other closing terms and conditions for each transaction, the reaction to the transactions 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 our 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 Mergers and Where to Find It

Proposed Merger with NBG Bancorp, Inc.

In connection with the proposed merger transaction with NBG Bancorp, Inc., State Bank Financial has filed a registration statement on Form S-4 (Registration Statement No. 333-211445) that includes a joint proxy statement/prospectus. The SEC declared the registration statement effective on June 15, 2016. A definitive proxy statement/prospectus dated June 15, 2016 was mailed on or about June 20, 2016 to the shareholders of NBG Bancorp, Inc. The registration statement and the proxy statement/prospectus filed with the SEC related to the proposed transaction contains 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, PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS FILED WITH OR THAT MAY BE FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE INTO THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS BECAUSE THOSE DOCUMENTS CONTAIN OR 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 its 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 are provided in the proxy statement/prospectus described above. 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.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.

Proposed Merger with S Bankshares, Inc.

In connection with the proposed merger transaction with S Bankshares, Inc., 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 S Bankshares, Inc. shareholders in connection with the transaction. The registration statement will include a proxy statement of S Bankshares, 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, S Bankshares, Inc. and the proposed transaction and related matters. WE URGE SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/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 STATEMENT/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 its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of S Bankshares, 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.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.


State Bank Financial Corporation
2Q16 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
2Q16 change vs
(Dollars in thousands, except per share amounts) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q16 2Q15
Income Statement Highlights
Interest income on loans $25,406 $24,342 $24,250 $24,218 $23,070 $1,064 $2,336
Accretion income on loans 13,961 9,743 14,240 11,156 8,365 4,218 5,596
Interest income on invested funds 4,726 4,673 4,139 4,050 4,032 53 694
Total interest income 44,093 38,758 42,629 39,424 35,467 5,335 8,626
Interest expense 2,371 2,113 1,994 1,977 1,972 258 399
Net interest income 41,722 36,645 40,635 37,447 33,495 5,077 8,227
Provision for loan and lease losses 6 (134) 494 (265) 64 140 (58)
Amortization of FDIC receivable for loss share agreements (15,040) 15,040
Other noninterest income (1) 10,230 9,391 8,136 8,894 9,319 839 911
Total noninterest income 10,230 9,391 8,136 8,894 (5,721) 839 15,951
Total noninterest expense 30,674 28,898 29,562 32,416 31,357 1,776 (683)
Income before income taxes 21,272 17,272 18,715 14,190 (3,647) 4,000 24,919
Income tax expense 7,433 6,434 6,594 5,071 (1,626) 999 9,059
Net income (loss) available to common shareholders $13,839 $10,838 $12,121 $9,119 $(2,021) $3,001 $15,860
Common Share Data
Basic net income (loss) per share $.38 $.29 $.33 $.26 $(.06) $.09 $.44
Diluted net income (loss) per share .37 .29 .33 .25 (.06) .08 .43
Cash dividends declared per share .14 .14 .14 .07 .06 .08
Book value per share 15.00 14.73 14.47 14.88 14.62 .27 .38
Tangible book value per share (2) 13.77 13.49 13.22 13.78 13.51 .28 .26
Market price per share (quarter end) 20.35 19.76 21.03 20.68 21.70 .59 (1.35)
Common Shares Outstanding
Common stock 36,894,641 37,052,008 37,077,848 35,753,855 35,763,791 (157,367) 1,130,850
Weighted average shares outstanding:
Basic 35,822,654 36,092,269 35,208,607 34,687,354 34,654,689 (269,615) 1,167,965
Diluted (3) 35,923,691 36,187,662 36,140,474 36,003,068 34,654,689 (263,971) 1,269,002
Average Balance Sheet Highlights
Loans $2,326,666 $2,250,518 $2,203,993 $2,136,746 $2,099,798 $76,148 $226,868
Assets 3,524,231 3,476,646 3,455,342 3,344,023 3,316,424 47,585 207,807
Deposits 2,873,019 2,854,514 2,842,788 2,766,314 2,746,818 18,505 126,201
Equity 546,838 542,444 534,702 529,498 525,259 4,394 21,579
Tangible common equity 501,221 496,287 491,346 489,757 485,337 4,934 15,884


State Bank Financial Corporation
2Q16 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
2Q16 change vs
(Dollars in thousands, except per share amounts) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q16 2Q15
Key Metrics (4)
Return on average assets 1.58 1.25 1.39 1.08 (.24) .33 1.82
Return on average equity 10.18 8.04 8.99 6.83 (1.54) 2.14 11.72
Yield on earning assets 5.37 4.79 5.23 4.98 4.58 .58 .79
Cost of funds .33 .29 .28 .28 .29 .04 .04
Rate on interest-bearing liabilities .46 .42 .39 .40 .39 .04 .07
Net interest margin 5.08 4.53 4.99 4.73 4.33 .55 .75
Net interest margin excluding accretion income (5) 3.53 3.48 3.40 3.52 3.45 .05 .08
Average tangible equity to average tangible assets (2) 14.41 14.47 14.40 14.82 14.81 (.06) (.40)
Leverage ratio (6) 14.56 14.59 14.48 14.93 14.92 (.03) (.36)
Tier I risk-based capital ratio (6) 16.68 17.09 17.71 18.20 19.12 (.41) (2.44)
Total risk-based capital ratio (6) 17.59 18.13 18.75 19.28 20.28 (.54) (2.69)
Efficiency ratio (7) 59.04 62.77 60.61 69.95 112.90 (3.73) (53.86)
Average loans to average deposits 80.98 78.84 77.53 77.24 76.44 2.14 4.54
Noninterest-bearing deposits to total deposits 28.75 30.68 28.87 29.45 27.85 (1.93) .90


(1) Includes all line items of noninterest income other than amortization of FDIC receivable for loss share agreements.
(2) Denotes a non-GAAP financial measure. See Reconciliation of Non-GAAP Measures (Table 8) for further information.
(3) Because we 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.
(4) Income statement ratios and yield/rate information are annualized for the applicable period.
(5) Excludes accretion income on loans and average purchased credit impaired loans.
(6) Current period capital ratios are estimated as of the date of this earnings release.
(7) Noninterest expenses divided by net interest income plus noninterest income.


State Bank Financial Corporation
2Q16 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
2Q16 change vs
(Dollars in thousands) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q16 2Q15
Assets
Cash and amounts due from depository institutions $11,964 $14,398 $12,175 $15,734 $21,903 $(2,434) $(9,939)
Interest-bearing deposits in other financial institutions 70,603 102,355 163,187 153,937 179,831 (31,752) (109,228)
Cash and cash equivalents 82,567 116,753 175,362 169,671 201,734 (34,186) (119,167)
Investment securities available-for-sale 824,980 849,576 887,705 831,548 815,277 (24,596) 9,703
Investment securities held-to-maturity 63,080 60,591 2,489 63,080
Loans 2,345,096 2,258,533 2,160,217 2,139,691 2,042,186 86,563 302,910
Allowance for loan and lease losses (27,599) (30,345) (29,075) (28,930) (29,569) 2,746 1,970
Loans, net 2,317,497 2,228,188 2,131,142 2,110,761 2,012,617 89,309 304,880
Loans held-for-sale 71,302 55,219 54,933 59,563 64,047 16,083 7,255
Other real estate owned 11,578 11,590 10,530 11,363 15,055 (12) (3,477)
Premises and equipment, net 42,153 42,802 42,980 43,982 45,608 (649) (3,455)
Goodwill 36,357 36,357 36,357 31,049 31,049 5,308
Other intangibles, net 9,029 9,556 10,101 8,486 8,922 (527) 107
SBA servicing rights 3,165 2,882 2,626 2,463 2,185 283 980
Bank-owned life insurance 59,749 59,281 58,819 58,347 57,810 468 1,939
Other assets 65,046 60,176 59,512 61,440 46,004 4,870 19,042
Total assets $3,586,503 $3,532,971 $3,470,067 $3,388,673 $3,300,308 $53,532 $286,195
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits $829,673 $891,511 $826,216 $823,146 $762,100 $(61,838) $67,573
Interest-bearing deposits 2,055,817 2,014,087 2,035,746 1,972,042 1,974,185 41,730 81,632
Total deposits 2,885,490 2,905,598 2,861,962 2,795,188 2,736,285 (20,108) 149,205
Securities sold under agreements to repurchase 33,923 33,503 32,179 4,872 11,747 420 22,176
FHLB borrowings 62,000 62,000 62,000
Notes payable 398 1,808 1,812 2,761 2,765 (1,410) (2,367)
Other liabilities 51,336 46,207 37,624 53,691 26,527 5,129 24,809
Total liabilities 3,033,147 2,987,116 2,933,577 2,856,512 2,777,324 46,031 255,823
Total shareholders’ equity 553,356 545,855 536,490 532,161 522,984 7,501 30,372
Total liabilities and shareholders’ equity $3,586,503 $3,532,971 $3,470,067 $3,388,673 $3,300,308 $53,532 $286,195
Capital Ratios (1)
Average equity to average assets 15.52% 15.60% 15.47% 15.83% 15.84% (.08)% (.32)%
Leverage ratio 14.56 14.59 14.48 14.93 14.92 (.03) (.36)
CET1 risk-based capital ratio 16.68 17.09 17.71 18.20 19.12 (.41) (2.44)
Tier I risk-based capital ratio 16.68 17.09 17.71 18.20 19.12 (.41) (2.44)
Total risk-based capital ratio 17.59 18.13 18.75 19.28 20.28 (.54) (2.69)

(1) Current period capital ratios are estimated as of the date of this earning release.


State Bank Financial Corporation
2Q16 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
2Q16 change vs
(Dollars in thousands, except per share amounts) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q16 2Q15
Net Interest Income:
Interest income on loans $25,406 $24,342 $24,250 $24,218 $23,070 $1,064 $2,336
Accretion income on loans 13,961 9,743 14,240 11,156 8,365 4,218 5,596
Interest income on invested funds 4,726 4,673 4,139 4,050 4,032 53 694
Interest expense 2,371 2,113 1,994 1,977 1,972 258 399
Net interest income 41,722 36,645 40,635 37,447 33,495 5,077 8,227
Provision for loan and lease losses 6 (134) 494 (265) 64 140 (58)
Net interest income after provision for loan and lease losses 41,716 36,779 40,141 37,712 33,431 4,937 8,285
Noninterest Income:
Amortization of FDIC receivable for loss share agreements (15,040) 15,040
Service charges on deposits 1,352 1,386 1,495 1,491 1,501 (34) (149)
Mortgage banking income 3,551 3,041 2,011 3,079 3,480 510 71
Payroll fee income 1,111 1,327 1,165 1,004 956 (216) 155
SBA income 1,685 1,502 1,316 1,720 1,380 183 305
ATM income 769 745 741 742 773 24 (4)
Bank-owned life insurance income 468 462 472 537 462 6 6
Gain (loss) on sale of investment securities 396 13 16 17 (59) 383 455
Other 898 915 920 304 826 (17) 72
Total noninterest income 10,230 9,391 8,136 8,894 (5,721) 839 15,951
Noninterest Expense:
Salaries and employee benefits 20,662 18,760 19,914 23,293 20,506 1,902 156
Occupancy and equipment 3,015 3,101 2,995 3,113 3,219 (86) (204)
Data processing 2,211 2,075 2,378 2,097 2,435 136 (224)
Legal and professional fees 976 953 1,091 1,089 1,284 23 (308)
Merger-related expenses 319 717 876 319 (557)
Marketing 619 502 792 491 599 117 20
Federal deposit insurance premiums and other regulatory fees 553 562 518 621 455 (9) 98
Loan collection and OREO costs (96) 485 (690) (1,198) (114) (581) 18
Amortization of intangibles 528 545 509 436 442 (17) 86
Other 1,887 1,915 2,055 1,757 1,655 (28) 232
Total noninterest expense 30,674 28,898 29,562 32,416 31,357 1,776 (683)
Income (Loss) Before Income Taxes 21,272 17,272 18,715 14,190 (3,647) 4,000 24,919
Income tax expense (benefit) 7,433 6,434 6,594 5,071 (1,626) 999 9,059
Net Income (Loss) $13,839 $10,838 $12,121 $9,119 $(2,021) $3,001 $15,860
Net Income (Loss) Per Share
Basic $.38 $.29 $.33 $.26 $(.06) $.09 $.44
Diluted .37 .29 .33 .25 (.06) .08 .43
Weighted Average Shares Outstanding
Basic 35,822,654 36,092,269 35,208,607 34,687,354 34,654,689 (269,615) 1,167,965
Diluted 35,923,691 36,187,662 36,140,474 36,003,068 34,654,689 (263,971) 1,269,002



State Bank Financial Corporation
2Q16 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)
Six Months Ended June 30 Change
(Dollars in thousands, except per share amounts) 2016 2015
Net Interest Income:
Interest income on loans $49,748 $44,470 $5,278
Accretion income on loans 23,704 24,434 (730)
Interest income on invested funds 9,399 7,634 1,765
Interest expense 4,484 3,951 533
Net interest income 78,367 72,587 5,780
Provision for loan and lease losses (128) 3,257 (3,385)
Net interest income after provision for loan and lease losses 78,495 69,330 9,165
Noninterest Income:
Amortization of FDIC receivable for loss share agreements (16,488) 16,488
Service charges on deposits 2,738 2,990 (252)
Mortgage banking income 6,592 6,160 432
Payroll fee income 2,438 2,114 324
SBA income 3,187 2,503 684
ATM income 1,514 1,498 16
Bank-owned life insurance income 930 917 13
Gain on sale of investment securities 409 321 88
Other 1,813 3,066 (1,253)
Total noninterest income 19,621 3,081 16,540
Noninterest Expense:
Salaries and employee benefits 39,422 40,088 (666)
Occupancy and equipment 6,116 6,324 (208)
Data processing 4,286 4,715 (429)
Legal and professional fees 1,929 2,768 (839)
Merger-related expenses 319 1,013 (694)
Marketing 1,121 1,035 86
Federal deposit insurance premiums and other regulatory fees 1,115 961 154
Loan collection and OREO costs 389 291 98
Amortization of intangibles 1,073 859 214
Other 3,802 3,390 412
Total noninterest expense 59,572 61,444 (1,872)
Income Before Income Taxes 38,544 10,967 27,577
Income tax expense 13,867 3,784 10,083
Net Income $24,677 $7,183 $17,494
Net Income Per Share
Basic $.67 $.20 $.47
Diluted .67 .19 .48
Weighted Average Shares Outstanding
Basic 35,979,436 34,655,661 1,323,775
Diluted 36,077,820 35,976,989 100,831


State Bank Financial Corporation
2Q16 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
2Q16 change vs
(Dollars in thousands) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q16 2Q15
Composition of Loans
Organic loans (1):
Construction, land & land development $470,672 $452,654 $482,087 $412,788 $399,982 $18,018 $70,690
Other commercial real estate 748,949 719,340 661,062 705,616 634,943 29,609 114,006
Total commercial real estate 1,219,621 1,171,994 1,143,149 1,118,404 1,034,925 47,627 184,696
Residential real estate 139,832 140,493 140,613 127,823 118,612 (661) 21,220
Owner-occupied real estate 238,059 222,347 219,636 212,171 205,805 15,712 32,254
Commercial, financial & agricultural 290,245 233,169 181,513 165,305 126,157 57,076 164,088
Leases 82,977 93,490 71,539 54,814 26,709 (10,513) 56,268
Consumer 34,124 33,847 17,882 16,432 12,078 277 22,046
Total organic loans 2,004,858 1,895,340 1,774,332 1,694,949 1,524,286 109,518 480,572
Purchased non-credit impaired loans(2):
Construction, land & land development 11,427 13,959 18,598 37,326 61,089 (2,532) (49,662)
Other commercial real estate 64,665 70,444 74,506 79,878 91,212 (5,779) (26,547)
Total commercial real estate 76,092 84,403 93,104 117,204 152,301 (8,311) (76,209)
Residential real estate 60,100 65,948 69,053 75,987 82,668 (5,848) (22,568)
Owner-occupied real estate 56,414 57,519 61,313 69,619 73,409 (1,105) (16,995)
Commercial, financial & agricultural 11,121 13,315 14,216 19,529 28,656 (2,194) (17,535)
Consumer 1,978 2,213 2,624 3,080 3,505 (235) (1,527)
Total purchased non-credit impaired loans 205,705 223,398 240,310 285,419 340,539 (17,693) (134,834)
Purchased credit impaired loans (3):
Construction, land & land development 13,310 13,245 14,252 16,473 20,002 65 (6,692)
Other commercial real estate 39,218 40,119 40,742 42,637 48,187 (901) (8,969)
Total commercial real estate 52,528 53,364 54,994 59,110 68,189 (836) (15,661)
Residential real estate 56,887 60,579 64,011 67,218 70,537 (3,692) (13,650)
Owner-occupied real estate 24,281 24,834 25,364 30,655 35,036 (553) (10,755)
Commercial, financial & agricultural 722 871 1,050 2,132 3,234 (149) (2,512)
Consumer 115 147 156 208 365 (32) (250)
Total purchased credit impaired loans 134,533 139,795 145,575 159,323 177,361 (5,262) (42,828)
Total loans $2,345,096 $2,258,533 $2,160,217 $2,139,691 $2,042,186 $86,563 $302,910
Composition of Deposits
Noninterest-bearing demand deposits $829,673 $891,511 $826,216 $823,146 $762,100 $(61,838) $67,573
Interest-bearing transaction accounts 531,676 539,322 588,391 499,434 497,715 (7,646) 33,961
Savings and money market deposits 1,097,098 1,017,930 1,074,190 1,059,770 1,038,292 79,168 58,806
Time deposits less than $250,000 345,999 348,304 279,449 289,815 301,431 (2,305) 44,568
Time deposits $250,000 or greater 63,686 64,494 41,439 56,750 59,105 (808) 4,581
Brokered and wholesale time deposits 17,358 44,037 52,277 66,273 77,642 (26,679) (60,284)
Total deposits $2,885,490 $2,905,598 $2,861,962 $2,795,188 $2,736,285 $(20,108) $149,205

(1) Loans originated by State Bank and Trust Company.
(2) Consists of loans purchased in our acquisitions of Bank of Atlanta and First Bank of Georgia.
(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
2Q16 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
2Q16 change vs
(Dollars in thousands) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q16 2Q15
Allowance for loan and lease losses on organic loans
Beginning Balance $22,626 $21,224 $20,176 $19,594 $19,424 $1,402 $3,202
Charge-offs (2,307) (240) (110) (63) (64) (2,067) (2,243)
Recoveries 54 96 207 31 12 (42) 42
Net (charge-offs) recoveries (2,253) (144) 97 (32) (52) (2,109) (2,201)
Provision for loan and lease losses 1,635 1,546 951 614 222 89 1,413
Ending Balance $22,008 $22,626 $21,224 $20,176 $19,594 $(618) $2,414
Allowance for loan and lease losses on purchased non-credit impaired loans
Beginning Balance $166 $53 $ $ $ $113 $166
Charge-offs (1) (63) (46) 62 45
Recoveries 28 33 1 6 (5) 28
Net (charge-offs) recoveries 27 (30) 1 6 (46) 57 73
Provision for loan and lease losses (35) 143 52 (6) 46 (178) (81)
Ending Balance $158 $166 $53 $ $ $(8) $158
Allowance for loan and lease losses on purchased credit impaired loans
Beginning Balance $7,553 $7,798 $8,754 $9,975 $10,558 $(245) $(3,005)
Charge-offs (606) (1,516) (3,467) (3,282) (2,155) 910 1,549
Recoveries 80 3,094 3,020 2,934 1,227 (3,014) (1,147)
Net (charge-offs) recoveries (526) 1,578 (447) (348) (928) (2,104) 402
Provision for loan and lease losses (1) (1,594) (1,823) (509) (873) 345 229 (1,939)
Ending Balance $5,433 $7,553 $7,798 $8,754 $9,975 $(2,120) $(4,542)
Nonperforming organic assets
Nonaccrual loans $6,927 $9,416 $5,096 $5,117 $4,971 $(2,489) $1,956
Total nonperforming organic loans 6,927 9,416 5,096 5,117 4,971 (2,489) 1,956
Other real estate owned 42 33 33 500 160 9 (118)
Total nonperforming organic assets $6,969 $9,449 $5,129 $5,617 $5,131 $(2,480) $1,838
Nonperforming purchased non-credit impaired assets
Nonaccrual loans $1,744 $1,705 $1,280 $1,639 $232 $39 $1,512
Accruing TDRs 923 577 (923)
Total nonperforming PNCI loans 1,744 2,628 1,857 1,639 232 (884) 1,512
Other real estate owned 21 22 (1) 21
Total nonperforming PNCI assets $1,765 $2,650 $1,857 $1,639 $232 $(885) $1,533
Ratios for organic assets
Annualized QTD charge-offs (recoveries) on organic loans to average organic loans .46% .03% (.02)% .01% .01% .43% .45%
Nonperforming organic loans to organic loans .35 .50 .29 .30 .33 (.15) .02
Nonperforming organic assets to organic loans + OREO .35 .50 .29 .33 .34 (.15) .01
Past due organic loans to organic loans .18 .47 .10 .08 .08 (.29) .10
Allowance for loan and lease losses on organic loans to organic loans 1.10 1.19 1.20 1.19 1.29 (.09) (.19)
State Bank Financial Corporation
2Q16 Financial Supplement: Table 6 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
2Q16 change vs
(Dollars in thousands) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q16 2Q15
Ratios for purchased non-credit impaired loans
Annualized QTD charge-offs (recoveries) on PNCI loans to average PNCI loans (.05)% .05% % (.01)% .04% (.10)% (.09)%
Nonperforming PNCI loans to PNCI loans .85 1.18 .77 .57 .07 (.33) .78
Nonperforming PNCI assets to PNCI loans + OREO .86 1.19 .77 .57 .07 (.33) .79
Past due PNCI loans to PNCI loans .40 .30 .39 .64 .49 .10 (.09)
Allowance for loan and lease losses on PNCI loans to PNCI loans .08 .07 .02 .01 .08
Ratios for purchased credit impaired loans (2)
Annualized QTD charge-offs (recoveries) on PCI loans to average PCI loans 1.57% (4.50)% 1.20% .83% 2.07% 6.07% (.50)%
Past due PCI loans to PCI loans 10.92 17.90 16.64 14.15 13.30 (6.98) (2.38)
Allowance for loan and lease losses on PCI loans to PCI loans 4.04 5.40 5.36 5.49 5.62 (1.36) (1.58)

(1) Provision for loan and lease losses amount attributable to FDIC loss share agreements for purchased credit impaired loans was $0 for each of 2Q16, 1Q16, 4Q15, and 3Q15, and was $(549,000) for 2Q15.
(2) For each period presented, a portion of our purchased credit impaired loans were contractually past due; however, such delinquencies were included in our 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, we do not consider purchased credit impaired loans to be nonperforming assets.


State Bank Financial Corporation
2Q16 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
2Q16 change vs
(Dollars in thousands) 2Q16 1Q16 4Q15 3Q15 2Q15 1Q16 2Q15
Average Balances
Interest-bearing deposits in other financial institutions $80,638 $126,289 $188,966 $179,526 $191,653 (45,651) (111,015)
Investment securities 905,019 892,365 850,127 837,786 821,998 12,654 83,021
Loans, excluding purchased credit impaired (1) 2,191,506 2,109,449 2,055,933 1,969,651 1,920,219 82,057 271,287
Purchased credit impaired loans 135,160 141,069 148,060 167,095 179,579 (5,909) (44,419)
Total earning assets 3,312,323 3,269,172 3,243,086 3,154,058 3,113,449 43,151 198,874
Total nonearning assets 211,908 207,474 212,256 189,965 202,975 4,434 8,933
Total assets 3,524,231 3,476,646 3,455,342 3,344,023 3,316,424 47,585 207,807
Interest-bearing transaction accounts 531,359 538,926 559,113 486,514 522,147 (7,567) 9,212
Savings & money market deposits 1,052,106 1,036,498 1,066,783 1,042,941 1,035,706 15,608 16,400
Time deposits less than $250,000 351,883 314,950 283,276 295,304 309,725 36,933 42,158
Time deposits $250,000 or greater 64,869 53,786 50,784 57,511 57,375 11,083 7,494
Brokered and wholesale time deposits 24,471 48,039 56,298 70,004 82,840 (23,568) (58,369)
Other borrowings 61,146 33,635 26,106 15,507 11,667 27,511 49,479
Total interest-bearing liabilities 2,085,834 2,025,834 2,042,360 1,967,781 2,019,460 60,000 66,374
Noninterest-bearing deposits 848,331 862,315 826,534 814,040 739,025 (13,984) 109,306
Other liabilities 43,228 46,053 51,746 32,704 32,680 (2,825) 10,548
Shareholders’ equity 546,838 542,444 534,702 529,498 525,259 4,394 21,579
Total liabilities and shareholders' equity 3,524,231 3,476,646 3,455,342 3,344,023 3,316,424 47,585 207,807
Interest Margins (2)
Interest-bearing deposits in other financial institutions .33% .38% .28% .27% .29% (.05)% .04%
Investment securities, tax-equivalent basis (3) 2.07 2.05 1.87 1.86 1.90 .02 .17
Loans, excluding purchased credit impaired, tax-equivalent basis (4) 4.68 4.67 4.71 4.91 4.84 .01 (.16)
Purchased credit impaired loans 41.54 27.78 38.16 26.49 18.68 13.76 22.86
Total earning assets 5.37% 4.79% 5.23% 4.98% 4.58% .58% .79%
Interest-bearing transaction accounts .12 .12 .13 .13 .14 (.02)
Savings & money market deposits .53 .50 .48 .47 .46 .03 .07
Time deposits less than $250,000 .64 .51 .39 .38 .36 .13 .28
Time deposits $250,000 or greater .71 .53 .33 .36 .36 .18 .35
Brokered and wholesale time deposits 1.07 1.07 1.03 .97 .97 .10
Other borrowings .52 .65 .76 1.69 2.23 (.13) (1.71)
Total interest-bearing liabilities .46% .42% .39% .40% .39% .04% .07%
Net interest spread 4.91% 4.37% 4.84% 4.58% 4.19% .54% .72%
Net interest margin 5.08% 4.53% 4.99% 4.73% 4.33% .55% .75%
Net interest margin excluding accretion income 3.53% 3.48% 3.40% 3.52% 3.45% .05% .08%

(1) Includes average nonaccrual loans of $10.0 million for 2Q16, $8.9 million for 1Q16, $6.5 million for 4Q15, $5.9 million for 3Q15, and $4.9 million for 2Q15.
(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 2Q16, $2,000 for 1Q16, $3,000 for 4Q15, $4,000 for 3Q15, and $5,000 for 2Q15.
(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 $113,000 for 2Q16, $165,000 for 1Q16, $134,000 for 4Q15, $179,000 for 3Q15, and $104,000 for 2Q15.


State Bank Financial Corporation
2Q16 Financial Supplement: Table 8
Reconciliation of Non-GAAP Measures (1)
Quarterly (Unaudited)
2Q16 1Q16 4Q15 3Q15 2Q15
Book value per common share reconciliation
Tangible book value per common share$13.77 $13.49 $13.22 $13.78 $13.51
Effect of goodwill and other intangibles1.23 1.24 1.25 1.10 1.11
Book value per common share (GAAP)$15.00 $14.73 $14.47 $14.88 $14.62
Average equity to average assets reconciliation
Average tangible equity to average tangible assets14.41% 14.47% 14.40% 14.82% 14.81%
Effect of average goodwill and other intangibles1.11 1.13 1.07 1.01 1.03
Average equity to average assets (GAAP)15.52% 15.60% 15.47% 15.83% 15.84%

(1) Management evaluates the capital position 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: tangible book value per common share 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 capital position, (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. 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