×

State Bank Financial Corporation Reports Third Quarter 2016 Financial Results

  • Third quarter 2016 net income of $12.4 million, or $.34 per diluted share
  • Return on average assets of 1.39%
  • Positive trend in loan interest income continues
  • Net interest margin excluding accretion expands to 3.57%

ATLANTA, Oct. 27, 2016 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the quarter ended September 30, 2016. Net income for the third quarter of 2016 was $12.4 million, compared to $14.0 million in the second quarter of 2016 and $9.1 million in the third quarter of 2015. Fully diluted earnings per share were $.34 in the third quarter of 2016 compared to $.38 in the second quarter of 2016 and $.25 in the third quarter of 2015. Interest income on loans improved to $26.6 million in the third quarter, a $1.2 million increase from the second quarter of 2016 and a $2.4 million increase from the third quarter of 2015. The increase in interest income on loans as well as lower noninterest expense helped offset a decline in accretion income in the third quarter of 2016.

Joe Evans, Chairman and CEO of State Bank Financial, commented, “This was another solid quarter. I am very pleased with the way we continue to balance the delivery of current operating results with the build-out of markets and lines of business for the future.”

Operating Highlights

Net interest income of $38.1 million in the third quarter of 2016 decreased from $41.7 million in the second quarter of 2016 but increased from $37.4 million in the third quarter of 2015. Accretion income on loans was $9.3 million in the third quarter of 2016, down from $14.0 million in the second quarter of 2016 and $11.2 million in the third 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. There were no loan pool closings during the third quarters of 2016 or 2015. As of September 30, 2016, approximately $72 million of accretable discount remains to be recognized as loan accretion income.

Noninterest income was $9.8 million in the third quarter of 2016, compared to $10.2 million in the second quarter of 2016 and $8.9 million in the third quarter of 2015. Excluding gain on sale of securities, noninterest income declined $103 thousand, or 1.0%, from the previous quarter and increased $854 thousand, or 9.6%, from the third quarter of 2015. In the third quarter of 2016, income from mortgage banking and SBA lending totaled $3.2 million and $1.6 million, respectively. Payroll fee income of $1.1 million increased versus the prior quarter and prior year periods.

Total noninterest expense for the third quarter of 2016 was $28.5 million, a $2.2 million decrease from the second quarter of 2016, and a $3.9 million decrease from the third quarter of 2015. The decline was due primarily to lower salary and employee benefit costs, which were down $863 thousand from the previous quarter. Merger-related expenses totaled $135 thousand in the third quarter of 2016 compared to $319 thousand in the second quarter of 2016.

Financial Condition

Total assets at September 30, 2016 were $3.62 billion, up from $3.59 billion at June 30, 2016. Total loans were $2.3 billion at September 30, 2016, up $1.3 million from the second quarter of 2016. Period-end organic and purchased non-credit impaired loans increased to $2.2 billion at September 30, 2016, a net increase of $8.9 million from the second quarter of 2016. Purchased credit impaired loans decreased to $126.8 million at the end of the third quarter of 2016, a $7.7 million linked-quarter decline.

Tom Wiley, Vice Chairman and President, commented, “We originated over $390 million in new loans in the third quarter, but this was offset by a record level of paydowns as a number of our real estate clients profitably cashed out on their projects. Our loan pipeline remains strong as does our expectation for continued strong longer-term growth without compromising our high credit standards.”

The organic loan portfolio continued to perform well in the third quarter of 2016 as past due organic loans represented .09% of total organic loans. The allowance as a percent of loans declined three basis points to 1.07% at the end of the third quarter of 2016 and covers organic nonperforming assets by more than three times.

Total deposits at September 30, 2016 were $2.96 billion, up from $2.89 billion at the end of the second quarter of 2016. Period-end transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $76.3 million from the second quarter of 2016. Noninterest-bearing demand deposits represented 30.1% of total deposits as of September 30, 2016. Average noninterest-bearing demand deposits decreased $25.3 million from the second quarter of 2016.

Tangible book value per share was $13.99 at the end of the third quarter of 2016. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 14.64% and a Tier I risk-based capital ratio of 16.68%.

Recent Events

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 September 30, 2016, The National Bank of Georgia had assets of approximately $415 million, loans of approximately $356 million, deposits of approximately $323 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 October 26, 2016, State Bank Financial and NBG Bancorp executed an amendment to the merger agreement extending the date that the merger may be terminated from December 31, 2016 to March 31, 2017.

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 September 30, 2016, S Bank had assets of approximately $110 million, loans of approximately $81 million, and deposits of approximately $92 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. On October 26, 2016, State Bank Financial and S Bankshares executed an amendment to the merger agreement extending the date that the merger may be terminated from December 31, 2016 to February 28, 2017.

As noted in the previous paragraphs, State Bank Financial requested and was granted an extension of both merger agreements into the first quarter of 2017 as we determined additional time may be required to obtain regulatory approvals and to satisfy closing conditions necessary to complete the respective mergers. No other changes to the merger agreements were made. While we anticipate receiving regulatory approvals for both transactions by the end of 2016, these extensions will provide additional time for the parties to close the mergers if such regulatory approvals are not obtained until the first quarter of 2017. However, no assurance can be given as to when or if the necessary regulatory approvals will be received.

Detailed Results

Supplemental tables displaying financial results for the third quarter of 2016, the previous four quarters and year-to-date 2016 are included with this press release.

Non-GAAP Financial Measure

This press release contains a financial measure determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). For more information on this non-GAAP financial measure, please refer to 3Q16 Financial Supplement: Table 8, Reconciliation of Non-GAAP Measure.

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: 1.800.406.7408

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 September 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,” “anticipate,” “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 future accretion income on loans, statements regarding our ability to continue to balance the delivery of operating results with the build-out of markets and lines of businesses, statements regarding the strength of our loan pipeline and our expectations for continued strong longer-term loan growth that does not compromise our high credit standards, statements regarding our proposed mergers with NBG Bancorp, Inc. and S Bankshares, Inc., including our belief that we will receive regulatory approvals for both transactions by the end of 2016, 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 proxy statement of NBG Bancorp, Inc. and a prospectus of State Bank Financial. 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 has filed a registration statement on Form S-4 (Registration Statement No. 333-213807) that includes a proxy statement of S Bankshares, Inc. and a prospectus of State Bank Financial. The registration statement and the proxy statement/prospectus filed with the SEC related to the proposed transaction contains 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, 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 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 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.


State Bank Financial Corporation
3Q16 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
3Q16 change vs
(Dollars in thousands, except per share amounts) 3Q16 2Q16 1Q16 4Q15 3Q15 2Q16 3Q15
Income Statement Highlights
Interest income on loans $26,580 $25,406 $24,342 $24,250 $24,218 $1,174 $2,362
Accretion income on loans 9,335 13,961 9,743 14,240 11,156 (4,626) (1,821)
Interest income on invested funds 4,714 4,726 4,673 4,139 4,050 (12) 664
Total interest income 40,629 44,093 38,758 42,629 39,424 (3,464) 1,205
Interest expense 2,504 2,371 2,113 1,994 1,977 133 527
Net interest income 38,125 41,722 36,645 40,635 37,447 (3,597) 678
Provision for loan and lease losses (organic & PNCI loans) 7 1,600 1,689 1,003 608 (1,593) (601)
Provision for loan and lease losses (purchased credit impaired loans) 81 (1,594) (1,823) (509) (873) 1,675 954
Provision for loan and lease losses 88 6 (134) 494 (265) 82 353
Total noninterest income 9,769 10,230 9,391 8,136 8,894 (461) 875
Total noninterest expense 28,480 30,674 28,898 29,562 32,416 (2,194) (3,936)
Income before income taxes 19,326 21,272 17,272 18,715 14,190 (1,946) 5,136
Income tax expense 6,885 7,287 6,434 6,594 5,071 (402) 1,814
Net income $12,441 $13,985 $10,838 $12,121 $9,119 $(1,544) $3,322
Common Share Data
Basic earnings per share $.34 $.38 $.29 $.33 $.26 $(.04) $.08
Diluted earnings per share .34 .38 .29 .33 .25 (.04) .09
Cash dividends declared per share .14 .14 .14 .14 .07 .07
Book value per share 15.21 15.00 14.73 14.47 14.88 .21 .33
Tangible book value per share (1) 13.99 13.77 13.49 13.22 13.78 .22 .21
Market price per share (quarter end) 22.82 20.35 19.76 21.03 20.68 2.47 2.14
Common Shares Outstanding
Common stock 36,894,553 36,894,641 37,052,008 37,077,848 35,753,855 (88) 1,140,698
Weighted average shares outstanding:
Basic 35,863,183 35,822,654 36,092,269 35,208,607 34,687,354 40,529 1,175,829
Diluted 35,965,948 35,923,691 36,187,662 36,140,474 36,003,068 42,257 (37,120)
Average Balance Sheet Highlights
Loans $2,406,629 $2,326,666 $2,250,518 $2,203,993 $2,136,746 $79,963 $269,883
Assets 3,564,470 3,524,231 3,476,646 3,455,342 3,344,023 40,239 220,447
Deposits 2,866,822 2,873,019 2,854,514 2,842,788 2,766,314 (6,197) 100,508
Equity 557,365 546,838 542,444 534,702 529,498 10,527 27,867
Tangible common equity 512,265 501,221 496,287 491,346 489,757 11,044 22,508


State Bank Financial Corporation
3Q16 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
3Q16 change vs
(Dollars in thousands, except per share amounts) 3Q16 2Q16 1Q16 4Q15 3Q15 2Q16 3Q15
Key Metrics (2)
Return on average assets 1.39% 1.60% 1.25% 1.39% 1.08% (.21)% .31%
Return on average equity 8.88 10.29 8.04 8.99 6.83 (1.41) 2.05
Yield on earning assets 4.84 5.37 4.79 5.23 4.98 (.53) (.14)
Cost of funds .34 .33 .29 .28 .28 .01 .06
Rate on interest-bearing liabilities .47 .46 .42 .39 .40 .01 .07
Net interest margin 4.54 5.08 4.53 4.99 4.73 (.54) (.19)
Net interest margin excluding accretion income (3) 3.57 3.53 3.48 3.40 3.52 .04 .05
Leverage ratio (4) 14.64 14.56 14.59 14.48 14.93 .08 (.29)
Tier I risk-based capital ratio (4) 16.68 16.52 17.09 17.71 18.20 .16 (1.52)
Total risk-based capital ratio (4) 17.56 17.42 18.13 18.75 19.28 .14 (1.72)
Efficiency ratio (5) 59.46 59.04 62.77 60.61 69.95 .42 (10.49)
Average loans to average deposits 83.95 80.98 78.84 77.53 77.24 2.97 6.71
Noninterest-bearing deposits to total deposits 30.09 28.75 30.68 28.87 29.45 1.34 .64


(1) Denotes a non-GAAP financial measure. See Reconciliation of Non-GAAP Measure (Table 8) for further information.
(2) Income statement ratios and yield/rate information are annualized for the applicable period.
(3) Excludes accretion income on loans and average purchased credit impaired loans.
(4) Current period capital ratios are estimated as of the date of this earnings release.
(5) Noninterest expenses divided by net interest income plus noninterest income.


State Bank Financial Corporation
3Q16 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
3Q16 change vs
(Dollars in thousands) 3Q16 2Q16 1Q16 4Q15 3Q15 2Q16 3Q15
Assets
Cash and amounts due from depository institutions $10,648 $11,964 $14,398 $12,175 $15,734 $(1,316) $(5,086)
Interest-bearing deposits in other financial institutions 103,122 70,603 102,355 163,187 153,937 32,519 (50,815)
Cash and cash equivalents 113,770 82,567 116,753 175,362 169,671 31,203 (55,901)
Investment securities available-for-sale 822,655 824,980 849,576 887,705 831,548 (2,325) (8,893)
Investment securities held-to-maturity 67,071 63,080 60,591 3,991 67,071
Loans 2,346,346 2,345,096 2,258,533 2,160,217 2,139,691 1,250 206,655
Allowance for loan and lease losses (27,177) (27,599) (30,345) (29,075) (28,930) 422 1,753
Loans, net 2,319,169 2,317,497 2,228,188 2,131,142 2,110,761 1,672 208,408
Loans held-for-sale 63,852 71,302 55,219 54,933 59,563 (7,450) 4,289
Other real estate owned 10,609 11,578 11,590 10,530 11,363 (969) (754)
Premises and equipment, net 42,009 42,153 42,802 42,980 43,982 (144) (1,973)
Goodwill 36,357 36,357 36,357 36,357 31,049 5,308
Other intangibles, net 8,515 9,029 9,556 10,101 8,486 (514) 29
SBA servicing rights 3,275 3,165 2,882 2,626 2,463 110 812
Bank-owned life insurance 60,282 59,749 59,281 58,819 58,347 533 1,935
Other assets 68,820 65,046 60,176 59,512 61,440 3,774 7,380
Total assets $3,616,384 $3,586,503 $3,532,971 $3,470,067 $3,388,673 $29,881 $227,711
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits $890,588 $829,673 $891,511 $826,216 $823,146 $60,915 $67,442
Interest-bearing deposits 2,068,704 2,055,817 2,014,087 2,035,746 1,972,042 12,887 96,662
Total deposits 2,959,292 2,885,490 2,905,598 2,861,962 2,795,188 73,802 164,104
Securities sold under agreements to repurchase 20,124 33,923 33,503 32,179 4,872 (13,799) 15,252
FHLB borrowings 20,000 62,000 (42,000) 20,000
Notes payable 398 398 1,808 1,812 2,761 (2,363)
Other liabilities 55,436 51,336 46,207 37,624 53,691 4,100 1,745
Total liabilities 3,055,250 3,033,147 2,987,116 2,933,577 2,856,512 22,103 198,738
Total shareholders’ equity 561,134 553,356 545,855 536,490 532,161 7,778 28,973
Total liabilities and shareholders’ equity $3,616,384 $3,586,503 $3,532,971 $3,470,067 $3,388,673 $29,881 $227,711
Capital Ratios (1)
Average equity to average assets 15.64% 15.52% 15.60% 15.47% 15.83% .12% (.19)%
Leverage ratio 14.64 14.56 14.59 14.48 14.93 .08 (.29)
CET1 risk-based capital ratio 16.68 16.52 17.09 17.71 18.20 .16 (1.52)
Tier I risk-based capital ratio 16.68 16.52 17.09 17.71 18.20 .16 (1.52)
Total risk-based capital ratio 17.56 17.42 18.13 18.75 19.28 .14 (1.72)


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


State Bank Financial Corporation
3Q16 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
3Q16 change vs
(Dollars in thousands, except per share amounts) 3Q16 2Q16 1Q16 4Q15 3Q15 2Q16 3Q15
Net Interest Income:
Interest income on loans $26,580 $25,406 $24,342 $24,250 $24,218 $1,174 $2,362
Accretion income on loans 9,335 13,961 9,743 14,240 11,156 (4,626) (1,821)
Interest income on invested funds 4,714 4,726 4,673 4,139 4,050 (12) 664
Interest expense 2,504 2,371 2,113 1,994 1,977 133 527
Net interest income 38,125 41,722 36,645 40,635 37,447 (3,597) 678
Provision for loan and lease losses (organic & PNCI loans) 7 1,600 1,689 1,003 608 (1,593) (601)
Provision for loan and lease losses (purchased credit impaired loans) 81 (1,594) (1,823) (509) (873) 1,675 954
Provision for loan and lease losses 88 6 (134) 494 (265) 82 353
Net interest income after provision for loan and lease losses 38,037 41,716 36,779 40,141 37,712 (3,679) 325
Noninterest Income:
Service charges on deposits 1,383 1,352 1,386 1,495 1,491 31 (108)
Mortgage banking income 3,216 3,551 3,041 2,011 3,079 (335) 137
Payroll fee income 1,128 1,111 1,327 1,165 1,004 17 124
SBA income 1,553 1,685 1,502 1,316 1,720 (132) (167)
ATM income 759 769 745 741 742 (10) 17
Bank-owned life insurance income 533 468 462 472 537 65 (4)
Gain on sale of investment securities 38 396 13 16 17 (358) 21
Other 1,159 898 915 920 304 261 855
Total noninterest income 9,769 10,230 9,391 8,136 8,894 (461) 875
Noninterest Expense:
Salaries and employee benefits 19,799 20,662 18,760 19,914 23,293 (863) (3,494)
Occupancy and equipment 2,984 3,015 3,101 2,995 3,113 (31) (129)
Data processing 2,097 2,211 2,075 2,378 2,097 (114)
Legal and professional fees 1,064 976 953 1,091 1,089 88 (25)
Merger-related expenses 135 319 717 (184) (582)
Marketing 665 619 502 792 491 46 174
Federal deposit insurance premiums and other regulatory fees 441 553 562 518 621 (112) (180)
Loan collection costs and OREO activity (841) (96) 485 (690) (1,198) (745) 357
Amortization of intangibles 513 528 545 509 436 (15) 77
Other 1,623 1,887 1,915 2,055 1,757 (264) (134)
Total noninterest expense 28,480 30,674 28,898 29,562 32,416 (2,194) (3,936)
Income Before Income Taxes 19,326 21,272 17,272 18,715 14,190 (1,946) 5,136
Income tax expense 6,885 7,287 6,434 6,594 5,071 (402) 1,814
Net Income $12,441 $13,985 $10,838 $12,121 $9,119 $(1,544) $3,322
Net income allocated to participating securities $348 $408 $285 $349 $272 $(60) $76
Net income allocated to common shareholders 12,093 13,577 10,553 11,772 8,847 (1,484) 3,246
Earnings Per Share
Basic $.34 $.38 $.29 $.33 $.26 $(.04) $.08
Diluted .34 .38 .29 .33 .25 (.04) .09
Weighted Average Shares Outstanding
Basic 35,863,183 35,822,654 36,092,269 35,208,607 34,687,354 40,529 1,175,829
Diluted 35,965,948 35,923,691 36,187,662 36,140,474 36,003,068 42,257 (37,120)



State Bank Financial Corporation
3Q16 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)
Nine Months Ended September 30 Change
(Dollars in thousands, except per share amounts) 2016 2015
Net Interest Income:
Interest income on loans $76,328 $68,688 $7,640
Accretion income on loans 33,039 35,590 (2,551)
Interest income on invested funds 14,113 11,684 2,429
Interest expense 6,988 5,928 1,060
Net interest income 116,492 110,034 6,458
Provision for loan and lease losses (organic & PNCI loans) 3,296 1,948 1,348
Provision for loan and lease losses (purchased credit impaired loans) (3,336) 1,044 (4,380)
Provision for loan and lease losses (40) 2,992 (3,032)
Net interest income after provision for loan and lease losses 116,532 107,042 9,490
Noninterest Income:
Amortization of FDIC receivable for loss share agreements (16,488) 16,488
Service charges on deposits 4,121 4,481 (360)
Mortgage banking income 9,808 9,239 569
Payroll fee income 3,566 3,118 448
SBA income 4,740 4,223 517
ATM income 2,273 2,240 33
Bank-owned life insurance income 1,463 1,454 9
Gain on sale of investment securities 447 338 109
Other 2,972 3,370 (398)
Total noninterest income 29,390 11,975 17,415
Noninterest Expense:
Salaries and employee benefits 59,221 63,381 (4,160)
Occupancy and equipment 9,100 9,437 (337)
Data processing 6,383 6,812 (429)
Legal and professional fees 2,993 3,857 (864)
Merger-related expenses 454 1,730 (1,276)
Marketing 1,786 1,526 260
Federal deposit insurance premiums and other regulatory fees 1,556 1,582 (26)
Loan collection costs and OREO activity (452) (907) 455
Amortization of intangibles 1,586 1,295 291
Other 5,425 5,147 278
Total noninterest expense 88,052 93,860 (5,808)
Income Before Income Taxes 57,870 25,157 32,713
Income tax expense 20,606 8,855 11,751
Net Income $37,264 $16,302 $20,962
Net income allocated to participating securities $1,021 $452 $569
Net income allocated to common shareholders 36,243 15,850 20,393
Earnings Per Share
Basic $1.01 $.46 $.55
Diluted 1.01 .45 .56
Weighted Average Shares Outstanding
Basic 35,940,402 34,315,916 1,624,486
Diluted 36,040,655 35,615,974 424,681


State Bank Financial Corporation
3Q16 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
3Q16 change vs
(Dollars in thousands) 3Q16 2Q16 1Q16 4Q15 3Q15 2Q16 3Q15
Composition of Loans
Organic loans (1):
Construction, land & land development $486,299 $470,672 $452,654 $482,087 $412,788 $15,627 $73,511
Other commercial real estate 744,270 748,949 719,340 661,062 705,616 (4,679) 38,654
Total commercial real estate 1,230,569 1,219,621 1,171,994 1,143,149 1,118,404 10,948 112,165
Residential real estate 139,926 139,832 140,493 140,613 127,823 94 12,103
Owner-occupied real estate 239,726 238,059 222,347 219,636 212,171 1,667 27,555
Commercial, financial & agricultural 306,141 290,245 233,169 181,513 165,305 15,896 140,836
Leases 74,722 82,977 93,490 71,539 54,814 (8,255) 19,908
Consumer 39,373 34,124 33,847 17,882 16,432 5,249 22,941
Total organic loans 2,030,457 2,004,858 1,895,340 1,774,332 1,694,949 25,599 335,508
Purchased non-credit impaired loans (2):
Construction, land & land development 10,035 11,427 13,959 18,598 37,326 (1,392) (27,291)
Other commercial real estate 58,261 64,665 70,444 74,506 79,878 (6,404) (21,617)
Total commercial real estate 68,296 76,092 84,403 93,104 117,204 (7,796) (48,908)
Residential real estate 56,468 60,100 65,948 69,053 75,987 (3,632) (19,519)
Owner-occupied real estate 52,016 56,414 57,519 61,313 69,619 (4,398) (17,603)
Commercial, financial & agricultural 10,447 11,121 13,315 14,216 19,529 (674) (9,082)
Consumer 1,826 1,978 2,213 2,624 3,080 (152) (1,254)
Total purchased non-credit impaired loans 189,053 205,705 223,398 240,310 285,419 (16,652) (96,366)
Purchased credit impaired loans (3):
Construction, land & land development 11,564 13,310 13,245 14,252 16,473 (1,746) (4,909)
Other commercial real estate 38,238 39,218 40,119 40,742 42,637 (980) (4,399)
Total commercial real estate 49,802 52,528 53,364 54,994 59,110 (2,726) (9,308)
Residential real estate 53,953 56,887 60,579 64,011 67,218 (2,934) (13,265)
Owner-occupied real estate 22,389 24,281 24,834 25,364 30,655 (1,892) (8,266)
Commercial, financial & agricultural 608 722 871 1,050 2,132 (114) (1,524)
Consumer 84 115 147 156 208 (31) (124)
Total purchased credit impaired loans 126,836 134,533 139,795 145,575 159,323 (7,697) (32,487)
Total loans $2,346,346 $2,345,096 $2,258,533 $2,160,217 $2,139,691 $1,250 $206,655
Composition of Deposits
Noninterest-bearing demand deposits $890,588 $829,673 $891,511 $826,216 $823,146 $60,915 $67,442
Interest-bearing transaction accounts 547,078 531,676 539,322 588,391 499,434 15,402 47,644
Savings and money market deposits 1,101,458 1,097,098 1,017,930 1,074,190 1,059,770 4,360 41,688
Time deposits less than $250,000 332,873 345,999 348,304 279,449 289,815 (13,126) 43,058
Time deposits $250,000 or greater 57,556 63,686 64,494 41,439 56,750 (6,130) 806
Brokered and wholesale time deposits 29,739 17,358 44,037 52,277 66,273 12,381 (36,534)
Total deposits $2,959,292 $2,885,490 $2,905,598 $2,861,962 $2,795,188 $73,802 $164,104


(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
3Q16 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
3Q16 change vs
(Dollars in thousands) 3Q16 2Q16 1Q16 4Q15 3Q15 2Q16 3Q15
Allowance for loan and lease losses on organic loans
Beginning Balance $22,008 $22,626 $21,224 $20,176 $19,594 $(618) $2,414
Charge-offs (311) (2,307) (240) (110) (63) 1,996 (248)
Recoveries 39 54 96 207 31 (15) 8
Net (charge-offs) recoveries (272) (2,253) (144) 97 (32) 1,981 (240)
Provision for loan and lease losses 1,635 1,546 951 614 (1,635) (614)
Ending Balance $21,736 $22,008 $22,626 $21,224 $20,176 $(272) $1,560
Allowance for loan and lease losses on purchased non-credit impaired loans
Beginning Balance $158 $166 $53 $ $ $(8) $158
Charge-offs (16) (1) (63) (15) (16)
Recoveries 1 28 33 1 6 (27) (5)
Net (charge-offs) recoveries (15) 27 (30) 1 6 (42) (21)
Provision for loan and lease losses 7 (35) 143 52 (6) 42 13
Ending Balance $150 $158 $166 $53 $ $(8) $150
Allowance for loan and lease losses on purchased credit impaired loans
Beginning Balance $5,433 $7,553 $7,798 $8,754 $9,975 $(2,120) $(4,542)
Charge-offs (223) (606) (1,516) (3,467) (3,282) 383 3,059
Recoveries 80 3,094 3,020 2,934 (80) (2,934)
Net (charge-offs) recoveries (223) (526) 1,578 (447) (348) 303 125
Provision for loan and lease losses 81 (1,594) (1,823) (509) (873) 1,675 954
Ending Balance $5,291 $5,433 $7,553 $7,798 $8,754 $(142) $(3,463)
Nonperforming organic assets
Nonaccrual loans $6,423 $6,927 $9,416 $5,096 $5,117 $(504) $1,306
Total nonperforming organic loans 6,423 6,927 9,416 5,096 5,117 (504) 1,306
Other real estate owned 83 42 33 33 500 41 (417)
Total nonperforming organic assets $6,506 $6,969 $9,449 $5,129 $5,617 $(463) $889
Nonperforming purchased non-credit impaired assets
Nonaccrual loans $1,672 $1,744 $1,705 $1,280 $1,639 $(72) $33
Accruing TDRs 923 577
Total nonperforming PNCI loans 1,672 1,744 2,628 1,857 1,639 (72) 33
Other real estate owned 21 21 22 21
Total nonperforming PNCI assets $1,693 $1,765 $2,650 $1,857 $1,639 $(72) $54
Ratios for organic assets
Annualized QTD charge-offs (recoveries) on organic loans to average organic loans .05% .47% .03% (.02)% .01% (.42)% .04%
Nonperforming organic loans to organic loans .32 .35 .50 .29 .30 (.03) .02
Nonperforming organic assets to organic loans + OREO .32 .35 .50 .29 .33 (.03) (.01)
Past due organic loans to organic loans .09 .18 .47 .10 .08 (.09) .01
Allowance for loan and lease losses on organic loans to organic loans 1.07 1.10 1.19 1.20 1.19 (.03) (.12)
State Bank Financial Corporation
3Q16 Financial Supplement: Table 6 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
3Q16 change vs
(Dollars in thousands) 3Q16 2Q16 1Q16 4Q15 3Q15 2Q16 3Q15
Ratios for purchased non-credit impaired loans
Annualized QTD charge-offs (recoveries) on PNCI loans to average PNCI loans .03% (.05)% .05% % (.01)% .08% .04%
Nonperforming PNCI loans to PNCI loans .88 .85 1.18 .77 .57 .03 .31
Nonperforming PNCI assets to PNCI loans + OREO .90 .86 1.19 .77 .57 .04 .33
Past due PNCI loans to PNCI loans .41 .40 .30 .39 .64 .01 (.23)
Allowance for loan and lease losses on PNCI loans to PNCI loans .08 .08 .07 .02 .08
Ratios for purchased credit impaired loans (1)
Annualized QTD charge-offs (recoveries) on PCI loans to average PCI loans .68% 1.57% (4.50)% 1.20% .83% (.89)% (.15)%
Past due PCI loans to PCI loans 11.00 10.92 17.90 16.64 14.15 .08 (3.15)
Allowance for loan and lease losses on PCI loans to PCI loans 4.17 4.04 5.40 5.36 5.49 .13 (1.32)


(1) 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
3Q16 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
3Q16 change vs
(Dollars in thousands) 3Q16 2Q16 1Q16 4Q15 3Q15 2Q16 3Q15
Average Balances
Interest-bearing deposits in other financial institutions $63,315 $80,638 $126,289 $188,966 $179,526 (17,323) (116,211)
Investment securities 881,642 905,019 892,365 850,127 837,786 (23,377) 43,856
Loans, excluding purchased credit impaired (1) 2,275,859 2,191,506 2,109,449 2,055,933 1,969,651 84,353 306,208
Purchased credit impaired loans 130,770 135,160 141,069 148,060 167,095 (4,390) (36,325)
Total earning assets 3,351,586 3,312,323 3,269,172 3,243,086 3,154,058 39,263 197,528
Total nonearning assets 212,884 211,908 207,474 212,256 189,965 976 22,919
Total assets 3,564,470 3,524,231 3,476,646 3,455,342 3,344,023 40,239 220,447
Interest-bearing transaction accounts 515,974 531,359 538,926 559,113 486,514 (15,385) 29,460
Savings & money market deposits 1,105,635 1,052,106 1,036,498 1,066,783 1,042,941 53,529 62,694
Time deposits less than $250,000 340,275 351,883 314,950 283,276 295,304 (11,608) 44,971
Time deposits $250,000 or greater 61,172 64,869 53,786 50,784 57,511 (3,697) 3,661
Brokered and wholesale time deposits 20,723 24,471 48,039 56,298 70,004 (3,748) (49,281)
Other borrowings 94,455 61,146 33,635 26,106 15,507 33,309 78,948
Total interest-bearing liabilities 2,138,234 2,085,834 2,025,834 2,042,360 1,967,781 52,400 170,453
Noninterest-bearing deposits 823,043 848,331 862,315 826,534 814,040 (25,288) 9,003
Other liabilities 45,828 43,228 46,053 51,746 32,704 2,600 13,124
Shareholders’ equity 557,365 546,838 542,444 534,702 529,498 10,527 27,867
Total liabilities and shareholders' equity 3,564,470 3,524,231 3,476,646 3,455,342 3,344,023 40,239 220,447
Interest Margins (2)
Interest-bearing deposits in other financial institutions .28% .33% .38% .28% .27% (.05)% .01%
Investment securities, tax-equivalent basis (3) 2.11 2.07 2.05 1.87 1.86 .04 .25
Loans, excluding purchased credit impaired, tax-equivalent basis (4) 4.67 4.68 4.67 4.71 4.91 (.01) (.24)
Purchased credit impaired loans 28.40 41.54 27.78 38.16 26.49 (13.14) 1.91
Total earning assets 4.84% 5.37% 4.79% 5.23% 4.98% (.53)% (.14)%
Interest-bearing transaction accounts .12 .12 .12 .13 .13 (.01)
Savings & money market deposits .54 .53 .50 .48 .47 .01 .07
Time deposits less than $250,000 .67 .64 .51 .39 .38 .03 .29
Time deposits $250,000 or greater .77 .71 .53 .33 .36 .06 .41
Brokered and wholesale time deposits .92 1.07 1.07 1.03 .97 (.15) (.05)
Other borrowings .40 .52 .65 .76 1.69 (.12) (1.29)
Total interest-bearing liabilities .47% .46% .42% .39% .40% .01% .07%
Net interest spread 4.37% 4.91% 4.37% 4.84% 4.58% (.54)% (.21)%
Net interest margin 4.54% 5.08% 4.53% 4.99% 4.73% (.54)% (.19)%
Net interest margin excluding accretion income 3.57% 3.53% 3.48% 3.40% 3.52% .04% .05%


(1) Includes average nonaccrual loans of $8.6 million for 3Q16, $10.0 million for 2Q16, $8.9 million for 1Q16, $6.5 million for 4Q15, and $5.9 million for 3Q15.
(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 $0 for 3Q16, $2,000 for 2Q16, $2,000 for 1Q16, $3,000 for 4Q15, and $4,000 for 3Q15.
(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 $142,000 for 3Q16, $113,000 for 2Q16, $165,000 for 1Q16, $134,000 for 4Q15, and $179,000 for 3Q15.


State Bank Financial Corporation
3Q16 Financial Supplement: Table 8
Reconciliation of Non-GAAP Measure (1)
Quarterly (Unaudited)
3Q16 2Q16 1Q16 4Q15 3Q15
Book value per common share reconciliation
Tangible book value per common share$13.99 $13.77 $13.49 $13.22 $13.78
Effect of goodwill and other intangibles1.22 1.23 1.24 1.25 1.10
Book value per common share (GAAP)$15.21 $15.00 $14.73 $14.47 $14.88

(1) This press release includes tangible book value per common share, a financial measure not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The tangible book value measure is a non-GAAP measure and excludes the effect of the period end balance of intangible assets. Management believes that this non-GAAP tangible measure provides additional useful information, particularly since this measure is widely used by industry analysts for companies with prior merger and acquisition activities.

Reconciliations of this non-GAAP financial measures to the most directly comparable GAAP financial measure is presented in the accompanying table. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. This non-GAAP financial measure should not be considered as a substitute 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