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State Bank Financial Corporation Reports Fourth Quarter and Full Year 2016 Financial Results

Full Year 2016 Highlights

  • Record earnings of $47.6 million
  • Return on average assets of 1.34%
  • Completed NBG Bancorp and S Bankshares merger transactions
  • $4.2 billion in total assets at year-end
  • $254 million of loan growth and $156 million of deposit growth, excluding acquisitions
  • Interest income excluding accretion increased 12%

ATLANTA, Jan. 26, 2017 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the fourth quarter and full year ended December 31, 2016. Full year net income for 2016 was $47.6 million, or $1.28 per fully diluted share, compared to $28.4 million, or $.77 per fully diluted share, for full year 2015. Net income for the fourth quarter of 2016 was $10.3 million, compared to $12.4 million in the third quarter of 2016 and $12.1 million in the fourth quarter of 2015. Fully diluted earnings per share were $.28 in the fourth quarter of 2016 compared to $.34 in the third quarter of 2016 and $.33 in the fourth quarter of 2015. The fourth quarter of 2016 included $3.5 million of merger-related expenses, which reduced earnings per share by approximately $.06 in the quarter, net of tax.

Joe Evans, Chairman and CEO of State Bank Financial, commented, “2016 was a great year. We had record earnings and completed two bank acquisitions that pushed us over $4 billion in assets. We ended the year with strong momentum, and I am very optimistic about our opportunities in 2017.”

Operating Highlights

Interest income on loans improved to $26.7 million in the fourth quarter of 2016, a $116,000 increase from the third quarter of 2016 and a $2.4 million increase from the fourth quarter of 2015. Net interest income of $39.1 million in the fourth quarter of 2016 increased from $38.1 million in the third quarter of 2016 but declined from $40.6 million in the fourth quarter of 2015. Accretion income on loans of $10.3 million in the fourth quarter of 2016 was positively impacted by a $2.2 million gain from loan pool closings. Accretion income was $9.3 million in the third quarter of 2016 and $14.2 million in the fourth quarter of 2015, which included a $4.1 million gain from loan pool closings. As of December 31, 2016, approximately $69 million of accretable discount, inclusive of $4 million from The National Bank of Georgia and S Bank, remains to be recognized as loan accretion income.

Noninterest income was $9.9 million in the fourth quarter of 2016, compared to $9.8 million in the third quarter of 2016 and $8.1 million in the fourth quarter of 2015. Payroll fee income increased $235,000 in the fourth quarter of 2016 to $1.4 million, and SBA income was up $165,000 to $1.7 million in the fourth quarter of 2016. Strong quarters from payroll fee income and SBA income helped offset lower fourth quarter mortgage banking income, which declined compared to the previous quarter as a result of normal seasonality. For full year 2016, noninterest income, excluding amortization of the FDIC receivable, increased 7.4% compared to 2015, including an increase in mortgage banking income of 9.5%, SBA income of 16.6%, and payroll fee income of 15.1%.

Total noninterest expense for the fourth quarter of 2016 was $32.9 million, a $4.4 million increase from
the third quarter of 2016, and a $3.3 million increase from the fourth quarter of 2015. The fourth quarter of 2016 included $3.5 million of merger-related expenses and a decrease in net gains on OREO of $714,000 compared to the third quarter of 2016. Legal and professional fees increased $638,000 in the fourth quarter due to expenses incurred related to a support system project. Salary and benefit expenses declined $245,000 from the third quarter of 2016 and $360,000 from the fourth quarter of 2015. For full year 2016, noninterest expense, excluding merger-related expenses and the net benefit of OREO activity, declined $5.7 million, or 4.7%, compared to 2015, primarily due to a $4.5 million decline in salary and benefit expenses.

Financial Condition

Comparison of period-end balance sheet metrics for the year ended December 31, 2016, to prior periods is materially affected by the acquisitions of The National Bank of Georgia and S Bank, which were each completed on December 31, 2016. Average balance sheet metrics for the quarter and year ended December 31, 2016, are not impacted by these acquisitions.

Total assets at December 31, 2016 were $4.22 billion, up from $3.62 billion at September 30, 2016. Total loans were $2.8 billion at December 31, 2016, up $468 million from the third quarter of 2016 due to approximately $424 million of loans acquired from The National Bank of Georgia and S Bank as well as organic loan growth during the quarter.

Tom Wiley, Vice Chairman and President, commented, “It was my privilege at year-end to welcome the customers and talented bankers from The National Bank of Georgia and S Bank to State Bank. These attractive new markets represent tremendous opportunity to build upon the outstanding trajectory of our core franchise. Results for 2016 clearly demonstrate our commitment to growing low-cost core deposits, emphasizing our fee income lines of business, increasing loans without compromising our credit metrics, prudently deploying capital, and becoming a more efficient company.”

Excluding the acquisitions, organic and purchased non-credit impaired loans increased to $2.3 billion at December 31, 2016, a net increase of $49.2 million from the third quarter of 2016 and $254.1 million from the fourth quarter of 2015. Purchased credit impaired loans, excluding the acquisitions, decreased to $121.8 million at the end of the fourth quarter of 2016, a $5.0 million decrease from the previous quarter and a $23.8 million decrease from the fourth quarter of 2015.

The organic loan portfolio continued to perform well in the fourth quarter of 2016 as past due organic
loans represented .06% of total organic loans. The allowance as a percent of loans declined six basis points to 1.01% at the end of the fourth quarter of 2016 and covers organic nonperforming assets by more than three times.

Total deposits at December 31, 2016 were $3.43 billion, up $472 million from $2.96 billion at September 30, 2016, including $414 million of deposits acquired from The National Bank of Georgia and S Bank. Period-end transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $211 million from the third quarter of 2016 inclusive of acquisitions. Noninterest-bearing demand deposits represented 28.7% of total deposits as of December 31, 2016.

Excluding the acquisitions, period-end total deposits increased $58.8 million in the fourth quarter of 2016, as $95.3 million of growth in transaction accounts was partially offset by declines in CDs and brokered deposits. Period-end total deposits increased $156.1 million in full year 2016, excluding the acquisitions. Average total deposits increased $108.7 million from the previous quarter and $132.7 million from the fourth quarter of 2015.

Tangible book value per share was $13.48 at the end of the fourth quarter of 2016. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 14.92% and a Tier I risk-based capital ratio of 14.76%.

Detailed Results

Supplemental tables displaying financial results for the fourth quarter of 2016, the previous four quarters, and full year 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 4Q16 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 and the year on a conference call today at 10:00 a.m. ET.

Dial in number: 1.877.311.6681

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 $4.2 billion in assets as of December 31, 2016, is an Atlanta-based bank holding company for State Bank and Trust Company. State Bank operates 31 full-service banking offices and eight mortgage origination offices in seven of Georgia’s eight largest MSAs.

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 the amount of accretable discount that remains, future accretion income on loans, statements regarding our strong momentum and opportunities in 2017, our belief that our new markets will provide a tremendous opportunity for us to build on the outstanding trajectory of our core franchise, 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, 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.

State Bank Financial Corporation
4Q16 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
4Q16 change vs
(Dollars in thousands, except per share amounts) 4Q16 3Q16 2Q16 1Q16 4Q15 3Q16 4Q15
Income Statement Highlights
Interest income on loans $26,696 $26,580 $25,406 $24,342 $24,250 $116 $2,446
Accretion income on loans 10,271 9,335 13,961 9,743 14,240 936 (3,969)
Interest income on invested funds 4,810 4,714 4,726 4,673 4,139 96 671
Total interest income 41,777 40,629 44,093 38,758 42,629 1,148 (852)
Interest expense 2,631 2,504 2,371 2,113 1,994 127 637
Net interest income 39,146 38,125 41,722 36,645 40,635 1,021 (1,489)
Provision for loan and lease losses (organic & PNCI loans) 300 7 1,600 1,689 1,003 293 (703)
Provision for loan and lease losses (purchased credit impaired loans) (23) 81 (1,594) (1,823) (509) (104) 486
Provision for loan and lease losses 277 88 6 (134) 494 189 (217)
Total noninterest income 9,911 9,769 10,230 9,391 8,136 142 1,775
Total noninterest expense 32,875 28,480 30,674 28,898 29,562 4,395 3,313
Income before income taxes 15,905 19,326 21,272 17,272 18,715 (3,421) (2,810)
Income tax expense 5,578 6,885 7,287 6,434 6,594 (1,307) (1,016)
Net income $10,327 $12,441 $13,985 $10,838 $12,121 $(2,114) $(1,794)
Common Share Data
Basic earnings per share $.28 $.34 $.38 $.29 $.33 $(.06) $(.05)
Diluted earnings per share .28 .34 .38 .29 .33 (.06) (.05)
Cash dividends declared per share .14 .14 .14 .14 .14
Book value per share 15.80 15.21 15.00 14.73 14.47 .59 1.33
Tangible book value per share (1) 13.48 13.99 13.77 13.49 13.22 (.51) .26
Market price per share (quarter end) 26.86 22.82 20.35 19.76 21.03 4.04 5.83
Common Shares Outstanding
Common stock 38,845,573 36,894,553 36,894,641 37,052,008 37,077,848 1,951,020 1,767,725
Weighted average shares outstanding:
Basic 35,904,009 35,863,183 35,822,654 36,092,269 35,208,607 40,826 695,402
Diluted 36,009,098 35,965,948 35,923,691 36,187,662 36,140,474 43,150 (131,376)
Average Balance Sheet Highlights
Loans $2,431,512 $2,406,629 $2,326,666 $2,250,518 $2,203,993 $24,883 $227,519
Assets 3,636,159 3,564,470 3,524,231 3,476,646 3,455,342 71,689 180,817
Deposits 2,975,510 2,866,822 2,873,019 2,854,514 2,842,788 108,688 132,722
Equity 559,561 557,365 546,838 542,444 534,702 2,196 24,859
Tangible common equity 514,982 512,265 501,221 496,287 491,346 2,717 23,636


State Bank Financial Corporation
4Q16 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
4Q16 change vs
(Dollars in thousands, except per share amounts) 4Q16 3Q16 2Q16 1Q16 4Q15 3Q16 4Q15
Key Metrics (2)
Return on average assets 1.13% 1.39% 1.60% 1.25% 1.39% (.26)% (.26)%
Return on average equity 7.34 8.88 10.29 8.04 8.99 (1.54) (1.65)
Yield on earning assets 4.87 4.84 5.37 4.79 5.23 .03 (.36)
Cost of funds .35 .34 .33 .29 .28 .01 .07
Rate on interest-bearing liabilities .49 .47 .46 .42 .39 .02 .10
Net interest margin 4.56 4.54 5.08 4.53 4.99 .02 (.43)
Net interest margin excluding accretion income (3) 3.50 3.57 3.53 3.48 3.40 (.07) .10
Leverage ratio (4) 14.92 14.64 14.56 14.59 14.48 .28 .44
Tier I risk-based capital ratio (4) 14.76 16.68 16.52 17.09 17.71 (1.92) (2.95)
Total risk-based capital ratio (4) 15.51 17.56 17.42 18.13 18.75 (2.05) (3.24)
Efficiency ratio (5) 67.01 59.46 59.04 62.77 60.61 7.55 6.40
Average loans to average deposits 81.72 83.95 80.98 78.84 77.53 (2.23) 4.19
Noninterest-bearing deposits to total deposits 28.69 30.09 28.75 30.68 28.87 (1.40) (.18)

(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
4Q16 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
4Q16 change vs
(Dollars in thousands) 4Q16 3Q16 2Q16 1Q16 4Q15 3Q16 4Q15
Assets
Cash and amounts due from depository institutions $13,219 $10,648 $11,964 $14,398 $12,175 $2,571 $1,044
Interest-bearing deposits in other financial institutions 132,851 103,122 70,603 102,355 163,187 29,729 (30,336)
Federal funds sold 3,523 3,523 3,523
Cash and cash equivalents 149,593 113,770 82,567 116,753 175,362 35,823 (25,769)
Investment securities available-for-sale 847,178 822,655 824,980 849,576 887,705 24,523 (40,527)
Investment securities held-to-maturity 67,063 67,071 63,080 60,591 (8) 67,063
Loans 2,814,572 2,346,346 2,345,096 2,258,533 2,160,217 468,226 654,355
Allowance for loan and lease losses (26,598) (27,177) (27,599) (30,345) (29,075) 579 2,477
Loans, net 2,787,974 2,319,169 2,317,497 2,228,188 2,131,142 468,805 656,832
Loans held-for-sale 52,169 63,852 71,302 55,219 54,933 (11,683) (2,764)
Other real estate owned 10,897 10,609 11,578 11,590 10,530 288 367
Premises and equipment, net 52,056 42,009 42,153 42,802 42,980 10,047 9,076
Goodwill 77,084 36,357 36,357 36,357 36,357 40,727 40,727
Other intangibles, net 12,749 8,515 9,029 9,556 10,101 4,234 2,648
SBA servicing rights 3,477 3,275 3,165 2,882 2,626 202 851
Bank-owned life insurance 65,371 60,282 59,749 59,281 58,819 5,089 6,552
Other assets 99,248 68,820 65,046 60,176 59,512 30,428 39,736
Total assets $4,224,859 $3,616,384 $3,586,503 $3,532,971 $3,470,067 $608,475 $754,792
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits $984,419 $890,588 $829,673 $891,511 $826,216 $93,831 $158,203
Interest-bearing deposits 2,446,746 2,068,704 2,055,817 2,014,087 2,035,746 378,042 411,000
Total deposits 3,431,165 2,959,292 2,885,490 2,905,598 2,861,962 471,873 569,203
Federal funds purchased and securities sold under agreements to repurchase 27,673 20,124 33,923 33,503 32,179 7,549 (4,506)
FHLB borrowings 47,014 20,000 62,000 27,014 47,014
Notes payable 398 398 398 1,808 1,812 (1,414)
Other liabilities 104,976 55,436 51,336 46,207 37,624 49,540 67,352
Total liabilities 3,611,226 3,055,250 3,033,147 2,987,116 2,933,577 555,976 677,649
Total shareholders’ equity 613,633 561,134 553,356 545,855 536,490 52,499 77,143
Total liabilities and shareholders’ equity $4,224,859 $3,616,384 $3,586,503 $3,532,971 $3,470,067 $608,475 $754,792
Capital Ratios (1)
Average equity to average assets 15.39% 15.64% 15.52% 15.60% 15.47% (.25)% (.08)%
Leverage ratio 14.92 14.64 14.56 14.59 14.48 .28 .44
CET1 risk-based capital ratio 14.76 16.68 16.52 17.09 17.71 (1.92) (2.95)
Tier I risk-based capital ratio 14.76 16.68 16.52 17.09 17.71 (1.92) (2.95)
Total risk-based capital ratio 15.51 17.56 17.42 18.13 18.75 (2.05) (3.24)

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

State Bank Financial Corporation
4Q16 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
4Q16 change vs
(Dollars in thousands, except per share amounts) 4Q16 3Q16 2Q16 1Q16 4Q15 3Q16 4Q15
Net Interest Income:
Interest income on loans $26,696 $26,580 $25,406 $24,342 $24,250 $116 $2,446
Accretion income on loans 10,271 9,335 13,961 9,743 14,240 936 (3,969)
Interest income on invested funds 4,810 4,714 4,726 4,673 4,139 96 671
Interest expense 2,631 2,504 2,371 2,113 1,994 127 637
Net interest income 39,146 38,125 41,722 36,645 40,635 1,021 (1,489)
Provision for loan and lease losses (organic & PNCI loans) 300 7 1,600 1,689 1,003 293 (703)
Provision for loan and lease losses (purchased credit impaired loans) (23) 81 (1,594) (1,823) (509) (104) 486
Provision for loan and lease losses 277 88 6 (134) 494 189 (217)
Net interest income after provision for loan and lease losses 38,869 38,037 41,716 36,779 40,141 832 (1,272)
Noninterest Income:
Service charges on deposits 1,319 1,383 1,352 1,386 1,495 (64) (176)
Mortgage banking income 2,511 3,216 3,551 3,041 2,011 (705) 500
Payroll fee income 1,363 1,128 1,111 1,327 1,165 235 198
SBA income 1,718 1,553 1,685 1,502 1,316 165 402
ATM income 735 759 769 745 741 (24) (6)
Bank-owned life insurance income 467 533 468 462 472 (66) (5)
Gain on sale of investment securities 42 38 396 13 16 4 26
Other 1,756 1,159 898 915 920 597 836
Total noninterest income 9,911 9,769 10,230 9,391 8,136 142 1,775
Noninterest Expense:
Salaries and employee benefits 19,554 19,799 20,662 18,760 19,914 (245) (360)
Occupancy and equipment 3,069 2,984 3,015 3,101 2,995 85 74
Data processing 2,131 2,097 2,211 2,075 2,378 34 (247)
Legal and professional fees 1,702 1,064 976 953 1,091 638 611
Merger-related expenses 3,507 135 319 3,372 3,507
Marketing 430 665 619 502 792 (235) (362)
Federal deposit insurance premiums and other regulatory fees 188 441 553 562 518 (253) (330)
Loan collection costs and OREO activity (127) (841) (96) 485 (690) 714 563
Amortization of intangibles 516 513 528 545 509 3 7
Other 1,905 1,623 1,887 1,915 2,055 282 (150)
Total noninterest expense 32,875 28,480 30,674 28,898 29,562 4,395 3,313
Income Before Income Taxes 15,905 19,326 21,272 17,272 18,715 (3,421) (2,810)
Income tax expense 5,578 6,885 7,287 6,434 6,594 (1,307) (1,016)
Net Income $10,327 $12,441 $13,985 $10,838 $12,121 $(2,114) $(1,794)
Net income allocated to participating securities $282 $348 $408 $285 $349 $(66) $(67)
Net income allocated to common shareholders 10,045 12,093 13,577 10,553 11,772 (2,048) (1,727)
Earnings Per Share
Basic $.28 $.34 $.38 $.29 $.33 $(.06) $(.05)
Diluted .28 .34 .38 .29 .33 (.06) (.05)
Weighted Average Shares Outstanding
Basic 35,904,009 35,863,183 35,822,654 36,092,269 35,208,607 40,826 695,402
Diluted 36,009,098 35,965,948 35,923,691 36,187,662 36,140,474 43,150 (131,376)


State Bank Financial Corporation
4Q16 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)
Years Ended December 31 Change
(Dollars in thousands, except per share amounts) 2016 2015
Net Interest Income:
Interest income on loans $103,024 $92,938 $10,086
Accretion income on loans 43,310 49,830 (6,520)
Interest income on invested funds 18,923 15,823 3,100
Interest expense 9,619 7,922 1,697
Net interest income 155,638 150,669 4,969
Provision for loan and lease losses (organic & PNCI loans) 3,596 2,951 645
Provision for loan and lease losses (purchased credit impaired loans) (3,359) 535 (3,894)
Provision for loan and lease losses 237 3,486 (3,249)
Net interest income after provision for loan and lease losses 155,401 147,183 8,218
Noninterest Income:
Amortization of FDIC receivable for loss share agreements (16,488) 16,488
Service charges on deposits 5,440 5,976 (536)
Mortgage banking income 12,319 11,250 1,069
Payroll fee income 4,929 4,283 646
SBA income 6,458 5,539 919
ATM income 3,008 2,981 27
Bank-owned life insurance income 1,930 1,926 4
Gain on sale of investment securities 489 354 135
Other 4,728 4,290 438
Total noninterest income 39,301 20,111 19,190
Noninterest Expense:
Salaries and employee benefits 78,775 83,295 (4,520)
Occupancy and equipment 12,169 12,432 (263)
Data processing 8,514 9,190 (676)
Legal and professional fees 4,695 4,948 (253)
Merger-related expenses 3,961 1,730 2,231
Marketing 2,216 2,318 (102)
Federal deposit insurance premiums and other regulatory fees 1,744 2,100 (356)
Loan collection costs and OREO activity (579) (1,597) 1,018
Amortization of intangibles 2,102 1,804 298
Other 7,330 7,202 128
Total noninterest expense 120,927 123,422 (2,495)
Income Before Income Taxes 73,775 43,872 29,903
Income tax expense 26,184 15,449 10,735
Net Income $47,591 $28,423 $19,168
Net income allocated to participating securities $1,303 $783 $520
Net income allocated to common shareholders 46,288 27,640 18,648
Earnings Per Share
Basic $1.29 $.79 $.50
Diluted 1.28 .77 .51
Weighted Average Shares Outstanding
Basic 35,931,528 34,810,855 1,120,673
Diluted 36,033,643 36,042,719 (9,076)


State Bank Financial Corporation
4Q16 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
4Q16 change vs
(Dollars in thousands) 4Q16 3Q16 2Q16 1Q16 4Q15 3Q16 4Q15
Composition of Loans
Organic loans (1):
Construction, land & land development $500,018 $486,299 $470,672 $452,654 $482,087 $13,719 $17,931
Other commercial real estate 754,790 744,270 748,949 719,340 661,062 10,520 93,728
Total commercial real estate 1,254,808 1,230,569 1,219,621 1,171,994 1,143,149 24,239 111,659
Residential real estate 144,295 139,926 139,832 140,493 140,613 4,369 3,682
Owner-occupied real estate 256,317 239,726 238,059 222,347 219,636 16,591 36,681
Commercial, financial & agricultural 327,381 306,141 290,245 233,169 181,513 21,240 145,868
Leases 71,724 74,722 82,977 93,490 71,539 (2,998) 185
Consumer 36,039 39,373 34,124 33,847 17,882 (3,334) 18,157
Total organic loans 2,090,564 2,030,457 2,004,858 1,895,340 1,774,332 60,107 316,232
Purchased non-credit impaired loans(2):
Construction, land & land development 51,208 10,035 11,427 13,959 18,598 41,173 32,610
Other commercial real estate 209,531 58,261 64,665 70,444 74,506 151,270 135,025
Total commercial real estate 260,739 68,296 76,092 84,403 93,104 192,443 167,635
Residential real estate 144,596 56,468 60,100 65,948 69,053 88,128 75,543
Owner-occupied real estate 115,566 52,016 56,414 57,519 61,313 63,550 54,253
Commercial, financial & agricultural 36,206 10,447 11,121 13,315 14,216 25,759 21,990
Consumer 6,255 1,826 1,978 2,213 2,624 4,429 3,631
Total purchased non-credit impaired loans 563,362 189,053 205,705 223,398 240,310 374,309 323,052
Purchased credit impaired loans (3):
Construction, land & land development 16,537 11,564 13,310 13,245 14,252 4,973 2,285
Other commercial real estate 60,742 38,238 39,218 40,119 40,742 22,504 20,000
Total commercial real estate 77,279 49,802 52,528 53,364 54,994 27,477 22,285
Residential real estate 54,507 53,953 56,887 60,579 64,011 554 (9,504)
Owner-occupied real estate 23,980 22,389 24,281 24,834 25,364 1,591 (1,384)
Commercial, financial & agricultural 4,533 608 722 871 1,050 3,925 3,483
Consumer 347 84 115 147 156 263 191
Total purchased credit impaired loans 160,646 126,836 134,533 139,795 145,575 33,810 15,071
Total loans $2,814,572 $2,346,346 $2,345,096 $2,258,533 $2,160,217 $468,226 $654,355
Composition of Deposits
Noninterest-bearing demand deposits $984,419 $890,588 $829,673 $891,511 $826,216 $93,831 $158,203
Interest-bearing transaction accounts 664,350 547,078 531,676 539,322 588,391 117,272 75,959
Savings and money market deposits 1,292,867 1,101,458 1,097,098 1,017,930 1,074,190 191,409 218,677
Time deposits less than $250,000 387,410 332,873 345,999 348,304 279,449 54,537 107,961
Time deposits $250,000 or greater 79,439 57,556 63,686 64,494 41,439 21,883 38,000
Brokered and wholesale time deposits 22,680 29,739 17,358 44,037 52,277 (7,059) (29,597)
Total deposits $3,431,165 $2,959,292 $2,885,490 $2,905,598 $2,861,962 $471,873 $569,203

(1) Loans originated by State Bank and Trust Company.
(2) Consists of loans purchased in our acquisitions of Bank of Atlanta, First Bank of Georgia, The National Bank of Georgia and S Bank.
(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
4Q16 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
4Q16 change vs
(Dollars in thousands) 4Q16 3Q16 2Q16 1Q16 4Q15 3Q16 4Q15
Allowance for loan and lease losses on organic loans
Beginning Balance $21,736 $22,008 $22,626 $21,224 $20,176 $(272) $1,560
Charge-offs (553) (311) (2,307) (240) (110) (242) (443)
Recoveries 34 39 54 96 207 (5) (173)
Net (charge-offs) recoveries (519) (272) (2,253) (144) 97 (247) (616)
Provision for loan and lease losses (131) 1,635 1,546 951 (131) (1,082)
Ending Balance $21,086 $21,736 $22,008 $22,626 $21,224 $(650) $(138)
Allowance for loan and lease losses on purchased non-credit impaired loans
Beginning Balance $150 $158 $166 $53 $ $(8) $150
Charge-offs (143) (16) (1) (63) (127) (143)
Recoveries 1 1 28 33 1
Net (charge-offs) recoveries (142) (15) 27 (30) 1 (127) (143)
Provision for loan and lease losses 431 7 (35) 143 52 424 379
Ending Balance $439 $150 $158 $166 $53 $289 $386
Allowance for loan and lease losses on purchased credit impaired loans
Beginning Balance $5,291 $5,433 $7,553 $7,798 $8,754 $(142) $(3,463)
Charge-offs (195) (223) (606) (1,516) (3,467) 28 3,272
Recoveries 80 3,094 3,020 (3,020)
Net (charge-offs) recoveries (195) (223) (526) 1,578 (447) 28 252
Provision for loan and lease losses (23) 81 (1,594) (1,823) (509) (104) 486
Ending Balance $5,073 $5,291 $5,433 $7,553 $7,798 $(218) $(2,725)
Nonperforming organic assets
Nonaccrual loans $6,234 $6,423 $6,927 $9,416 $5,096 $(189) $1,138
Total nonperforming organic loans 6,234 6,423 6,927 9,416 5,096 (189) 1,138
Other real estate owned 282 83 42 33 33 199 249
Total nonperforming organic assets $6,516 $6,506 $6,969 $9,449 $5,129 $10 $1,387
Nonperforming purchased non-credit impaired assets
Nonaccrual loans $3,381 $1,672 $1,744 $1,705 $1,280 $1,709 $2,101
Accruing TDRs 923 577 (577)
Total nonperforming PNCI loans 3,381 1,672 1,744 2,628 1,857 1,709 1,524
Other real estate owned 21 21 22 (21)
Total nonperforming PNCI assets $3,381 $1,693 $1,765 $2,650 $1,857 $1,688 $1,524
Ratios for organic assets
Annualized QTD charge-offs (recoveries) on organic loans to average organic loans .10% .05% .47% .03% (.02)% .05% .12%
Nonperforming organic loans to organic loans .30 .32 .35 .50 .29 (.02) .01
Nonperforming organic assets to organic loans + OREO .31 .32 .35 .50 .29 (.01) .02
Past due organic loans to organic loans .06 .09 .18 .47 .10 (.03) (.04)
Allowance for loan and lease losses on organic loans to organic loans 1.01 1.07 1.10 1.19 1.20 (.06) (.19)
State Bank Financial Corporation
4Q16 Financial Supplement: Table 6 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
4Q16 change vs
(Dollars in thousands) 4Q16 3Q16 2Q16 1Q16 4Q15 3Q16 4Q15
Ratios for purchased non-credit impaired loans
Annualized QTD charge-offs (recoveries) on PNCI loans to average PNCI loans .31% .03% (.05)% .05% % .28% .31%
Nonperforming PNCI loans to PNCI loans .60 .88 .85 1.18 .77 (.28) (.17)
Nonperforming PNCI assets to PNCI loans + OREO .60 .90 .86 1.19 .77 (.30) (.17)
Past due PNCI loans to PNCI loans .68 .41 .40 .30 .39 .27 .29
Allowance for loan and lease losses on PNCI loans to PNCI loans .08 .08 .08 .07 .02 .06
Ratios for purchased credit impaired loans (1)
Annualized QTD charge-offs (recoveries) on PCI loans to average PCI loans .63% .68% 1.57% (4.50)% 1.20% (.05)% (.57)%
Past due PCI loans to PCI loans 8.92 11.00 10.92 17.90 16.64 (2.08) (7.72)
Allowance for loan and lease losses on PCI loans to PCI loans 3.16 4.17 4.04 5.40 5.36 (1.01) (2.20)

(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
4Q16 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
4Q16 change vs
(Dollars in thousands) 4Q16 3Q16 2Q16 1Q16 4Q15 3Q16 4Q15
Average Balances
Interest-bearing deposits in other financial institutions $82,797 $63,315 $80,638 $126,289 $188,966 $19,482 $(106,169)
Investment securities 911,025 881,642 905,019 892,365 850,127 29,383 60,898
Loans, excluding purchased credit impaired (1) 2,307,794 2,275,859 2,191,506 2,109,449 2,055,933 31,935 251,861
Purchased credit impaired loans 123,718 130,770 135,160 141,069 148,060 (7,052) (24,342)
Total earning assets 3,425,334 3,351,586 3,312,323 3,269,172 3,243,086 73,748 182,248
Total nonearning assets 210,825 212,884 211,908 207,474 212,256 (2,059) (1,431)
Total assets 3,636,159 3,564,470 3,524,231 3,476,646 3,455,342 71,689 180,817
Interest-bearing transaction accounts 575,977 515,974 531,359 538,926 559,113 60,003 16,864
Savings & money market deposits 1,118,548 1,105,635 1,052,106 1,036,498 1,066,783 12,913 51,765
Time deposits less than $250,000 325,838 340,275 351,883 314,950 283,276 (14,437) 42,562
Time deposits $250,000 or greater 59,308 61,172 64,869 53,786 50,784 (1,864) 8,524
Brokered and wholesale time deposits 22,885 20,723 24,471 48,039 56,298 2,162 (33,413)
Other borrowings 52,555 94,455 61,146 33,635 26,106 (41,900) 26,449
Total interest-bearing liabilities 2,155,111 2,138,234 2,085,834 2,025,834 2,042,360 16,877 112,751
Noninterest-bearing deposits 872,954 823,043 848,331 862,315 826,534 49,911 46,420
Other liabilities 48,533 45,828 43,228 46,053 51,746 2,705 (3,213)
Shareholders’ equity 559,561 557,365 546,838 542,444 534,702 2,196 24,859
Total liabilities and shareholders' equity 3,636,159 3,564,470 3,524,231 3,476,646 3,455,342 71,689 180,817
Interest Margins (2)
Interest-bearing deposits in other financial institutions .31% .28% .33% .38% .28% .03% .03%
Investment securities, tax-equivalent basis (3) 2.07 2.11 2.07 2.05 1.87 (.04) .20
Loans, excluding purchased credit impaired, tax-equivalent basis (4) 4.63 4.67 4.68 4.67 4.71 (.04) (.08)
Purchased credit impaired loans 33.03 28.40 41.54 27.78 38.16 4.63 (5.13)
Total earning assets 4.87% 4.84% 5.37% 4.79% 5.23% .03% (.36)%
Interest-bearing transaction accounts .12 .12 .12 .12 .13 (.01)
Savings & money market deposits .59 .54 .53 .50 .48 .05 .11
Time deposits less than $250,000 .70 .67 .64 .51 .39 .03 .31
Time deposits $250,000 or greater .84 .77 .71 .53 .33 .07 .51
Brokered and wholesale time deposits .85 .92 1.07 1.07 1.03 (.07) (.18)
Other borrowings .45 .40 .52 .65 .76 .05 (.31)
Total interest-bearing liabilities .49% .47% .46% .42% .39% .02% .10%
Net interest spread 4.38% 4.37% 4.91% 4.37% 4.84% .01% (.46)%
Net interest margin 4.56% 4.54% 5.08% 4.53% 4.99% .02% (.43)%
Net interest margin excluding accretion income 3.50% 3.57% 3.53% 3.48% 3.40% (.07)% .10%

(1) Includes average nonaccrual loans of $8.4 million for 4Q16, $8.6 million for 3Q16, $10.0 million for 2Q16, $8.9 million for 1Q16, and $6.5 million for 4Q15.
(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 4Q16, $0 for 3Q16, $2,000 for 2Q16, $2,000 for 1Q16, and $3,000 for 4Q15.
(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 4Q16, $142,000 for 3Q16, $113,000 for 2Q16, $165,000 for 1Q16, and $134,000 for 4Q15.

State Bank Financial Corporation
4Q16 Financial Supplement: Table 8
Reconciliation of Non-GAAP Measure (1)
Quarterly (Unaudited)
4Q16 3Q16 2Q16 1Q16 4Q15
Book value per common share reconciliation
Book value per common share (GAAP)$15.80 $15.21 $15.00 $14.73 $14.47
Effect of goodwill and other intangibles(2.32) (1.22) (1.23) (1.24) (1.25)
Tangible book value per common share$13.48 $13.99 $13.77 $13.49 $13.22

(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