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State Bank Financial Corporation Reports First Quarter 2017 Financial Results

  • First quarter 2017 net income of $11.6 million, or $.30 per diluted share
  • Successful integration of two acquisitions, with conversion completed in February
  • 10% linked-quarter revenue growth
  • Loan growth of $46.7 million, or 7% annualized, excluding purchased credit impaired loans
  • Asset-sensitive balance sheet contributed to net interest margin expansion

ATLANTA, April 27, 2017 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the first quarter ended March 31, 2017. Net income for the first quarter of 2017 was $11.6 million, compared to $10.3 million in the fourth quarter of 2016 and $10.8 million in the first quarter of 2016. Fully diluted earnings per share were $.30 in the first quarter of 2017 compared to $.28 in the fourth quarter of 2016 and $.29 in the first quarter of 2016. The first quarter of 2017 included $2.2 million of merger-related expenses, which reduced earnings per share by approximately $.04 in the quarter, net of tax.

Joe Evans, Chairman and CEO of State Bank Financial, commented, “We are off to a fast start in 2017 as we kicked off the year by welcoming two new banks. Our new teams combined with solid performance throughout the existing franchise to generate net income of $11.6 million in the first quarter. Quick integration of the acquisitions should drive even better performance in future quarters as the merger and integration costs decline.”

Operating Highlights

Interest income on loans, excluding accretion income on loans, improved to $34.1 million in the first quarter of 2017, a $7.4 million increase from the fourth quarter of 2016 and a $9.7 million increase from the first quarter of 2016. Net interest income of $44.0 million in the first quarter of 2017 increased from $39.1 million in the fourth quarter of 2016 and $36.6 million in the first quarter of 2016. Accretion income on loans was $7.7 million in the first quarter of 2017, down from $10.3 million in the fourth quarter of 2016 and $9.7 million in the first quarter of 2016 as there were no loan pool closings in the first quarter of 2017. As of March 31, 2017, approximately $63 million of accretable discount remains to be recognized as loan accretion income.

Noninterest income was $9.5 million in the first quarter of 2017, compared to $9.9 million in the fourth quarter of 2016 and $9.4 million in the first quarter of 2016. A solid quarter for mortgage banking helped offset lower SBA income in the first quarter of 2017. Mortgage banking income increased $383,000 from the previous quarter to $2.9 million, while payroll and insurance income declined $33,000 to $1.5 million. SBA income declined $540,000 to $1.2 million in the first quarter of 2017 primarily due to timing of loan sales as well as rebuilding the loan pipeline after a strong fourth quarter in 2016.

Total noninterest expense, which was impacted by the recent acquisitions of The National Bank of Georgia and S Bank, totaled $34.6 million in the first quarter of 2017, compared to $32.9 million in the fourth quarter of 2016 and $28.9 million in the first quarter of 2016. The National Bank of Georgia and S Bank added approximately $2.6 million of total noninterest expense in the first quarter of 2017, as the full conversion and integration was not completed until midway through the first quarter of 2017. Additionally, $2.2 million of merger-related expenses were recorded in the first quarter of 2017.

Financial Condition

Total assets at March 31, 2017, were $4.20 billion, down from $4.23 billion at December 31, 2016. Total loans were $2.9 billion at March 31, 2017, up $40.2 million from the fourth quarter of 2016. Period-end organic and purchased non-credit impaired loans increased to $2.7 billion at March 31, 2017, a net increase of $46.7 million from the fourth quarter of 2016. Purchased credit impaired loans decreased to $154.2 million at the end of the first quarter of 2017, a $6.5 million linked-quarter decline.

Tom Wiley, Vice Chairman and President, commented, “We had 7% annualized loan growth in the first quarter, driven by organic loan growth of nearly 16% annualized, all while remaining disciplined with regards to risk and pricing. We also successfully converted and integrated two new banks into State Bank’s systems in February, and I could not be more pleased with how well-planned and minimally disruptive the integration process was for our clients. I am very optimistic about future growth in our markets, particularly the tremendous opportunities in our new markets.”

The organic loan portfolio continued to perform well in the first quarter of 2017 as past due organic
loans represented .08% of total organic loans. The provision for loan losses on organic loans was $1.3 million in the first quarter of 2017 and was primarily attributable to organic loan growth in the quarter. The allowance as a percent of loans was unchanged at 1.01% at the end of the first quarter of 2017 and covers organic nonperforming assets by more than three times.

Total deposits at March 31, 2017, were $3.41 billion, down $21.4 million from $3.43 billion at December 31, 2016. In the first quarter of 2017, a decline of $104.1 million in period-end transaction accounts, which are comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, was partially offset by a $100.8 million increase in savings and money market accounts. The changes in deposit balances were related to the seasonal cash operating cycle of State Bank’s clients. Noninterest-bearing demand deposits represented 27.7% of total deposits as of March 31, 2017.

Tangible book value per share was $13.66 at the end of the first quarter of 2017. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 13.04% and a Tier I risk-based capital ratio of 14.74%.

Detailed Results

Supplemental tables displaying financial results for the first quarter of 2017 and the previous four quarters are included with this press release.

Non-GAAP Financial Measures

This press release contains financial 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 1Q17 Financial Supplement: Table 7, 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: 1.800.678.2887

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 is completed 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 March 31, 2017, 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, future growth in our markets, particularly the tremendous opportunities in our new markets, our belief that quick integration of the recent acquisitions should drive better performance in future quarters, 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, particularly in our markets, 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
1Q17 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
1Q17 change vs
(Dollars in thousands, except per share amounts) 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16
Income Statement Highlights
Interest income on loans $34,060 $26,696 $26,580 $25,406 $24,342 $7,364 $9,718
Accretion income on loans 7,677 10,271 9,335 13,961 9,743 (2,594) (2,066)
Interest income on invested funds 5,460 4,810 4,714 4,726 4,673 650 787
Total interest income 47,197 41,777 40,629 44,093 38,758 5,420 8,439
Interest expense 3,239 2,631 2,504 2,371 2,113 608 1,126
Net interest income 43,958 39,146 38,125 41,722 36,645 4,812 7,313
Provision for loan and lease losses (organic & PNCI loans) 1,361 300 7 1,600 1,689 1,061 (328)
Provision for loan and lease losses (purchased credit impaired loans) (359) (23) 81 (1,594) (1,823) (336) 1,464
Provision for loan and lease losses 1,002 277 88 6 (134) 725 1,136
Total noninterest income 9,459 9,911 9,769 10,230 9,391 (452) 68
Total noninterest expense 34,565 32,875 28,480 30,674 28,898 1,690 5,667
Income before income taxes 17,850 15,905 19,326 21,272 17,272 1,945 578
Income tax expense 6,292 5,578 6,885 7,287 6,434 714 (142)
Net income $11,558 $10,327 $12,441 $13,985 $10,838 $1,231 $720
Common Share Data
Basic earnings per share $.30 $.28 $.34 $.38 $.29 $.02 $.01
Diluted earnings per share .30 .28 .34 .38 .29 .02 .01
Cash dividends declared per share .14 .14 .14 .14 .14
Book value per share 15.96 15.80 15.21 15.00 14.73 .16 1.23
Tangible book value per share (1) 13.66 13.48 13.99 13.77 13.49 .18 .17
Market price per share (quarter end) 26.12 26.86 22.82 20.35 19.76 (.74) 6.36
Common Shares Outstanding
Common stock 38,870,424 38,845,573 36,894,553 36,894,641 37,052,008 24,851 1,818,416
Weighted average shares outstanding:
Basic 37,867,718 35,904,009 35,863,183 35,822,654 36,092,269 1,963,709 1,775,449
Diluted 37,954,585 36,009,098 35,965,948 35,923,691 36,187,662 1,945,487 1,766,923
Average Balance Sheet Highlights
Loans $2,846,618 $2,431,512 $2,406,629 $2,326,666 $2,250,518 $415,106 $596,100
Assets 4,182,008 3,636,544 3,564,860 3,524,468 3,476,781 545,464 705,227
Deposits 3,423,506 2,975,510 2,866,822 2,873,019 2,854,514 447,996 568,992
Equity 617,056 559,561 557,365 546,838 542,444 57,495 74,612
Tangible common equity (1) 527,650 514,982 512,265 501,221 496,287 12,668 31,363


State Bank Financial Corporation
1Q17 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
1Q17 change vs
(Dollars in thousands, except per share amounts) 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16
Key Metrics (2)
Return on average assets 1.12% 1.13% 1.39% 1.60% 1.25% (.01)% (.13)%
Return on average equity 7.60 7.34 8.88 10.29 8.04 .26 (.44)
Yield on earning assets 4.93 4.87 4.84 5.37 4.79 .06 .14
Cost of funds .37 .35 .34 .33 .29 .02 .08
Rate on interest-bearing liabilities .52 .49 .47 .46 .42 .03 .10
Net interest margin 4.59 4.56 4.54 5.08 4.53 .03 .06
Net interest margin excluding accretion income (3) 3.95 3.50 3.57 3.53 3.48 .45 .47
Leverage ratio (4) 13.04 14.90 14.64 14.56 14.59 (1.86) (1.55)
Tier I risk-based capital ratio (4) 14.74 14.78 16.68 16.52 17.09 (.04) (2.35)
Total risk-based capital ratio (4) 15.49 15.52 17.56 17.42 18.13 (.03) (2.64)
Efficiency ratio (5) 64.71 67.01 59.46 59.04 62.77 (2.30) 1.94
Average loans to average deposits 83.15 81.72 83.95 80.98 78.84 1.43 4.31
Noninterest-bearing deposits to total deposits 27.71 28.69 30.09 28.75 30.68 (.98) (2.97)


__________________________
(1)Denotes a non-GAAP financial measure. See Reconciliation of Non-GAAP Measures (Table 7) 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 expense divided by net interest income plus noninterest income.


State Bank Financial Corporation
1Q17 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
1Q17 change vs
(Dollars in thousands) 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16
Assets
Cash and amounts due from depository institutions $12,101 $13,219 $10,648 $11,964 $14,398 $(1,118) $(2,297)
Interest-bearing deposits in other financial institutions 62,222 132,851 103,122 70,603 102,355 (70,629) (40,133)
Federal funds sold 3,523 (3,523)
Cash and cash equivalents 74,323 149,593 113,770 82,567 116,753 (75,270) (42,430)
Investment securities available-for-sale 896,297 847,178 822,655 824,980 849,576 49,119 46,721
Investment securities held-to-maturity 67,053 67,063 67,071 63,080 60,591 (10) 6,462
Loans 2,854,780 2,814,572 2,346,346 2,345,096 2,258,533 40,208 596,247
Allowance for loan and lease losses (26,976) (26,598) (27,177) (27,599) (30,345) (378) 3,369
Loans, net 2,827,804 2,787,974 2,319,169 2,317,497 2,228,188 39,830 599,616
Loans held-for-sale 51,380 52,169 63,852 71,302 55,219 (789) (3,839)
Other real estate owned 3,759 10,897 10,609 11,578 11,590 (7,138) (7,831)
Premises and equipment, net 51,535 52,056 42,009 42,153 42,802 (521) 8,733
Goodwill 77,084 77,084 36,357 36,357 36,357 40,727
Other intangibles, net 12,054 12,749 8,515 9,029 9,556 (695) 2,498
SBA servicing rights 3,547 3,477 3,275 3,165 2,882 70 665
Bank-owned life insurance 65,855 65,371 60,282 59,749 59,281 484 6,574
Other assets 71,990 99,654 69,211 65,309 60,418 (27,664) 11,572
Total assets $4,202,681 $4,225,265 $3,616,775 $3,586,766 $3,533,213 $(22,584) $669,468
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits $944,838 $984,419 $890,588 $829,673 $891,511 $(39,581) $53,327
Interest-bearing deposits 2,464,937 2,446,746 2,068,704 2,055,817 2,014,087 18,191 450,850
Total deposits 3,409,775 3,431,165 2,959,292 2,885,490 2,905,598 (21,390) 504,177
Federal funds purchased and securities sold under agreements to repurchase 25,056 27,673 20,124 33,923 33,503 (2,617) (8,447)
FHLB borrowings 100,000 47,014 20,000 62,000 52,986 100,000
Notes payable 398 398 398 398 1,808 (1,410)
Other liabilities 47,169 105,382 55,827 51,599 46,449 (58,213) 720
Total liabilities 3,582,398 3,611,632 3,055,641 3,033,410 2,987,358 (29,234) 595,040
Total shareholders’ equity 620,283 613,633 561,134 553,356 545,855 6,650 74,428
Total liabilities and shareholders’ equity $4,202,681 $4,225,265 $3,616,775 $3,586,766 $3,533,213 $(22,584) $669,468
Capital Ratios (1)
Average equity to average assets 14.76% 15.39% 15.63% 15.52% 15.60% (.63)% (.84)%
Leverage ratio 13.04 14.90 14.64 14.56 14.59 (1.86) (1.55)
CET1 risk-based capital ratio 14.74 14.78 16.68 16.52 17.09 (.04) (2.35)
Tier I risk-based capital ratio 14.74 14.78 16.68 16.52 17.09 (.04) (2.35)
Total risk-based capital ratio 15.49 15.52 17.56 17.42 18.13 (.03) (2.64)


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


State Bank Financial Corporation
1Q17 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
1Q17 change vs
(Dollars in thousands, except per share amounts) 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16
Net Interest Income:
Interest income on loans $34,060 $26,696 $26,580 $25,406 $24,342 $7,364 $9,718
Accretion income on loans 7,677 10,271 9,335 13,961 9,743 (2,594) (2,066)
Interest income on invested funds 5,460 4,810 4,714 4,726 4,673 650 787
Interest expense 3,239 2,631 2,504 2,371 2,113 608 1,126
Net interest income 43,958 39,146 38,125 41,722 36,645 4,812 7,313
Provision for loan and lease losses (organic & PNCI loans) 1,361 300 7 1,600 1,689 1,061 (328)
Provision for loan and lease losses (purchased credit impaired loans) (359) (23) 81 (1,594) (1,823) (336) 1,464
Provision for loan and lease losses 1,002 277 88 6 (134) 725 1,136
Net interest income after provision for loan and lease losses 42,956 38,869 38,037 41,716 36,779 4,087 6,177
Noninterest Income:
Service charges on deposits 1,467 1,319 1,383 1,352 1,386 148 81
Mortgage banking income 2,894 2,511 3,216 3,551 3,041 383 (147)
Payroll and insurance income 1,495 1,528 1,297 1,282 1,518 (33) (23)
SBA income 1,178 1,718 1,553 1,685 1,502 (540) (324)
ATM income 832 735 759 769 745 97 87
Bank-owned life insurance income 484 467 533 468 462 17 22
Gain on sale of investment securities 12 42 38 396 13 (30) (1)
Other 1,097 1,591 990 727 724 (494) 373
Total noninterest income 9,459 9,911 9,769 10,230 9,391 (452) 68
Noninterest Expense:
Salaries and employee benefits 22,057 19,554 19,799 20,662 18,760 2,503 3,297
Occupancy and equipment 3,280 3,069 2,984 3,015 3,101 211 179
Data processing 2,639 2,131 2,097 2,211 2,075 508 564
Legal and professional fees 1,805 1,702 1,064 976 953 103 852
Merger-related expenses 2,235 3,507 135 319 (1,272) 2,235
Marketing 664 430 665 619 502 234 162
Federal deposit insurance premiums and other regulatory fees 397 188 441 553 562 209 (165)
Loan collection costs and OREO activity (1,042) (127) (841) (96) 485 (915) (1,527)
Amortization of intangibles 696 516 513 528 545 180 151
Other 1,834 1,905 1,623 1,887 1,915 (71) (81)
Total noninterest expense 34,565 32,875 28,480 30,674 28,898 1,690 5,667
Income Before Income Taxes 17,850 15,905 19,326 21,272 17,272 1,945 578
Income tax expense 6,292 5,578 6,885 7,287 6,434 714 (142)
Net Income $11,558 $10,327 $12,441 $13,985 $10,838 $1,231 $720
Net income allocated to participating securities $295 $282 $348 $408 $285 $13 $10
Net income allocated to common shareholders 11,263 10,045 12,093 13,577 10,553 1,218 710
Earnings Per Share
Basic $.30 $.28 $.34 $.38 $.29 $.02 $.01
Diluted .30 .28 .34 .38 .29 .02 .01
Weighted Average Shares Outstanding
Basic 37,867,718 35,904,009 35,863,183 35,822,654 36,092,269 1,963,709 1,775,449
Diluted 37,954,585 36,009,098 35,965,948 35,923,691 36,187,662 1,945,487 1,766,923


State Bank Financial Corporation
1Q17 Financial Supplement: Table 4
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
1Q17 change vs
(Dollars in thousands) 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16
Composition of Loans
Organic loans (1):
Construction, land & land development $418,186 $500,018 $486,299 $470,672 $452,654 $(81,832) $(34,468)
Other commercial real estate 885,570 754,790 744,270 748,949 719,340 130,780 166,230
Total commercial real estate 1,303,756 1,254,808 1,230,569 1,219,621 1,171,994 48,948 131,762
Residential real estate 161,460 144,295 139,926 139,832 140,493 17,165 20,967
Owner-occupied real estate 251,703 256,317 239,726 238,059 222,347 (4,614) 29,356
Commercial, financial & agricultural 336,257 327,381 306,141 290,245 233,169 8,876 103,088
Leases 62,603 71,724 74,722 82,977 93,490 (9,121) (30,887)
Consumer 56,776 36,039 39,373 34,124 33,847 20,737 22,929
Total organic loans 2,172,555 2,090,564 2,030,457 2,004,858 1,895,340 81,991 277,215
Purchased non-credit impaired loans(2):
Construction, land & land development 43,787 51,208 10,035 11,427 13,959 (7,421) 29,828
Other commercial real estate 188,737 209,531 58,261 64,665 70,444 (20,794) 118,293
Total commercial real estate 232,524 260,739 68,296 76,092 84,403 (28,215) 148,121
Residential real estate 137,699 144,596 56,468 60,100 65,948 (6,897) 71,751
Owner-occupied real estate 119,871 115,566 52,016 56,414 57,519 4,305 62,352
Commercial, financial & agricultural 33,690 36,206 10,447 11,121 13,315 (2,516) 20,375
Consumer 4,281 6,255 1,826 1,978 2,213 (1,974) 2,068
Total purchased non-credit impaired loans 528,065 563,362 189,053 205,705 223,398 (35,297) 304,667
Purchased credit impaired loans (3):
Construction, land & land development 17,211 16,537 11,564 13,310 13,245 674 3,966
Other commercial real estate 60,664 60,742 38,238 39,218 40,119 (78) 20,545
Total commercial real estate 77,875 77,279 49,802 52,528 53,364 596 24,511
Residential real estate 49,728 54,507 53,953 56,887 60,579 (4,779) (10,851)
Owner-occupied real estate 22,099 23,980 22,389 24,281 24,834 (1,881) (2,735)
Commercial, financial & agricultural 4,153 4,533 608 722 871 (380) 3,282
Consumer 305 347 84 115 147 (42) 158
Total purchased credit impaired loans 154,160 160,646 126,836 134,533 139,795 (6,486) 14,365
Total loans $2,854,780 $2,814,572 $2,346,346 $2,345,096 $2,258,533 $40,208 $596,247
Composition of Deposits
Noninterest-bearing demand deposits $944,838 $984,419 $890,588 $829,673 $891,511 $(39,581) $53,327
Interest-bearing transaction accounts 599,858 664,350 547,078 531,676 539,322 (64,492) 60,536
Savings and money market deposits 1,393,711 1,292,867 1,101,458 1,097,098 1,017,930 100,844 375,781
Time deposits less than $250,000 369,430 387,410 332,873 345,999 348,304 (17,980) 21,126
Time deposits $250,000 or greater 85,459 79,439 57,556 63,686 64,494 6,020 20,965
Brokered and wholesale time deposits 16,479 22,680 29,739 17,358 44,037 (6,201) (27,558)
Total deposits $3,409,775 $3,431,165 $2,959,292 $2,885,490 $2,905,598 $(21,390) $504,177


__________________________
(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
1Q17 Financial Supplement: Table 5
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
1Q17 change vs
(Dollars in thousands) 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16
Allowance for loan and lease losses on organic loans
Beginning Balance $21,086 $21,736 $22,008 $22,626 $21,224 $(650) $(138)
Charge-offs (540) (553) (311) (2,307) (240) 13 (300)
Recoveries 77 34 39 54 96 43 (19)
Net (charge-offs) recoveries (463) (519) (272) (2,253) (144) 56 (319)
Provision for loan and lease losses 1,262 (131) 1,635 1,546 1,393 (284)
Ending Balance $21,885 $21,086 $21,736 $22,008 $22,626 $799 $(741)
Allowance for loan and lease losses on purchased non-credit impaired loans
Beginning Balance $439 $150 $158 $166 $53 $289 $386
Charge-offs (48) (143) (16) (1) (63) 95 15
Recoveries 1 1 1 28 33 (32)
Net (charge-offs) recoveries (47) (142) (15) 27 (30) 95 (17)
Provision for loan and lease losses 99 431 7 (35) 143 (332) (44)
Ending Balance $491 $439 $150 $158 $166 $52 $325
Allowance for loan and lease losses on purchased credit impaired loans
Beginning Balance $5,073 $5,291 $5,433 $7,553 $7,798 $(218) $(2,725)
Charge-offs (114) (195) (223) (606) (1,516) 81 1,402
Recoveries 80 3,094 (3,094)
Net (charge-offs) recoveries (114) (195) (223) (526) 1,578 81 (1,692)
Provision for loan and lease losses (359) (23) 81 (1,594) (1,823) (336) 1,464
Ending Balance $4,600 $5,073 $5,291 $5,433 $7,553 $(473) $(2,953)
Nonperforming organic assets
Nonaccrual loans $6,114 $6,234 $6,423 $6,927 $9,416 $(120) $(3,302)
Total nonperforming organic loans 6,114 6,234 6,423 6,927 9,416 (120) (3,302)
Other real estate owned 232 282 83 42 33 (50) 199
Total nonperforming organic assets $6,346 $6,516 $6,506 $6,969 $9,449 $(170) $(3,103)
Nonperforming purchased non-credit impaired assets
Nonaccrual loans $4,098 $3,381 $1,672 $1,744 $1,705 $717 $2,393
Accruing TDRs 923 (923)
Total nonperforming PNCI loans 4,098 3,381 1,672 1,744 2,628 717 1,470
Other real estate owned 21 21 22 (22)
Total nonperforming PNCI assets $4,098 $3,381 $1,693 $1,765 $2,650 $717 $1,448
Ratios for organic assets
Annualized QTD charge-offs (recoveries) on organic loans to average organic loans .09% .10% .05% .47% .03% (.01) % .06%
Nonperforming organic loans to organic loans .28 .30 .32 .35 .50 (.02) (.22)
Nonperforming organic assets to organic loans + OREO .29 .31 .32 .35 .50 (.02) (.21)
Past due organic loans to organic loans .08 .06 .09 .18 .47 .02 (.39)
Allowance for loan and lease losses on organic loans to organic loans 1.01 1.01 1.07 1.10 1.19 (.18)
State Bank Financial Corporation
1Q17 Financial Supplement: Table 5 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
1Q17 change vs
(Dollars in thousands) 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16
Ratios for purchased non-credit impaired loans
Annualized QTD charge-offs (recoveries) on PNCI loans to average PNCI loans .03% .31% .03% (.05) % .05% (.28) % (.02) %
Nonperforming PNCI loans to PNCI loans .78 .60 .88 .85 1.18 .18 (.40)
Nonperforming PNCI assets to PNCI loans + OREO .78 .60 .90 .86 1.19 .18 (.41)
Past due PNCI loans to PNCI loans .90 .68 .41 .40 .30 .22 .60
Allowance for loan and lease losses on PNCI loans to PNCI loans .09 .08 .08 .08 .07 .01 .02
Ratios for purchased credit impaired loans (1)
Annualized QTD charge-offs (recoveries) on PCI loans to average PCI loans .30% .63% .68% 1.57% (4.50) % (.33) % 4.80%
Past due PCI loans to PCI loans 10.68 8.92 11.00 10.92 17.90 1.76 (7.22)
Allowance for loan and lease losses on PCI loans to PCI loans 2.98 3.16 4.17 4.04 5.40 (.18) (2.42)


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(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
1Q17 Financial Supplement: Table 6
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
1Q17 change vs
(Dollars in thousands) 1Q17 4Q16 3Q16 2Q16 1Q16 4Q16 1Q16
Average Balances
Interest-bearing deposits in other financial institutions and federal funds sold $85,720 $82,797 $63,315 $80,638 $126,289 $2,923 $(40,569)
Investment securities 961,913 911,025 881,642 905,019 892,365 50,888 69,548
Loans, excluding purchased credit impaired (1) 2,692,564 2,307,794 2,275,859 2,191,506 2,109,449 384,770 583,115
Purchased credit impaired loans 154,054 123,718 130,770 135,160 141,069 30,336 12,985
Total earning assets 3,894,251 3,425,334 3,351,586 3,312,323 3,269,172 468,917 625,079
Total nonearning assets 287,757 211,210 213,274 212,145 207,609 76,547 80,148
Total assets 4,182,008 3,636,544 3,564,860 3,524,468 3,476,781 545,464 705,227
Interest-bearing transaction accounts 602,378 575,977 515,974 531,359 538,926 26,401 63,452
Savings & money market deposits 1,388,876 1,118,548 1,105,635 1,052,106 1,036,498 270,328 352,378
Time deposits less than $250,000 387,090 325,838 340,275 351,883 314,950 61,252 72,140
Time deposits $250,000 or greater 69,721 59,308 61,172 64,869 53,786 10,413 15,935
Brokered and wholesale time deposits 19,926 22,885 20,723 24,471 48,039 (2,959) (28,113)
Other borrowings 81,344 52,555 94,455 61,146 33,635 28,789 47,709
Total interest-bearing liabilities 2,549,335 2,155,111 2,138,234 2,085,834 2,025,834 394,224 523,501
Noninterest-bearing deposits 955,515 872,954 823,043 848,331 862,315 82,561 93,200
Other liabilities 60,102 48,918 46,218 43,465 46,188 11,184 13,914
Shareholders’ equity 617,056 559,561 557,365 546,838 542,444 57,495 74,612
Total liabilities and shareholders' equity 4,182,008 3,636,544 3,564,860 3,524,468 3,476,781 545,464 705,227
Interest Margins (2)
Interest-bearing deposits in other financial institutions and federal funds sold .44% .31% .28% .33% .38% .13% .06%
Investment securities, tax-equivalent basis (3) 2.26 2.07 2.11 2.07 2.05 .19 .21
Loans, excluding purchased credit impaired, tax-equivalent basis (4) 5.15 4.63 4.67 4.68 4.67 .52 .48
Purchased credit impaired loans 20.21 33.03 28.40 41.54 27.78 (12.82) (7.57)
Total earning assets 4.93% 4.87% 4.84% 5.37% 4.79% .06% .14%
Interest-bearing transaction accounts .12 .12 .12 .12 .12
Savings & money market deposits .60 .59 .54 .53 .50 .01 .10
Time deposits less than $250,000 .72 .70 .67 .64 .51 .02 .21
Time deposits $250,000 or greater .73 .84 .77 .71 .53 (.11) .20
Brokered and wholesale time deposits 1.06 .85 .92 1.07 1.07 .21 (.01)
Other borrowings .65 .45 .40 .52 .65 .20
Total interest-bearing liabilities .52% .49% .47% .46% .42% .03% .10%
Net interest spread 4.41% 4.38% 4.37% 4.91% 4.37% .03% .04%
Net interest margin 4.59% 4.56% 4.54% 5.08% 4.53% .03% .06%
Net interest margin excluding accretion income 3.95% 3.50% 3.57% 3.53% 3.48% .45% .47%


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(1) Includes average nonaccrual loans of $9.9 million for 1Q17, $8.4 million for 4Q16, $8.6 million for 3Q16, $10.0 million for 2Q16, and $8.9 million for 1Q16.
(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 1Q17, $0 for 4Q16, $0 for 3Q16, $2,000 for 2Q16, and $2,000 for 1Q16.
(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 $140,000 for 1Q17, $142,000 for 4Q16, $142,000 for 3Q16, $113,000 for 2Q16, and $165,000 for 1Q16.


State Bank Financial Corporation
1Q17 Financial Supplement: Table 7
Reconciliation of Non-GAAP Measures (1)
Quarterly (Unaudited)
(dollars in thousands, except per share amounts; taxable equivalent)1Q17 4Q16 3Q16 2Q16 1Q16
Book value per common share reconciliation
Book value per common share (GAAP)$15.96 $15.80 $15.21 $15.00 $14.73
Effect of goodwill and other intangibles(2.30) (2.32) (1.22) (1.23) (1.24)
Tangible book value per common share$13.66 $13.48 $13.99 $13.77 $13.49
Average tangible common equity reconciliation
Average equity (GAAP)$617,056 $559,561 $557,365 $546,838 $542,444
Effect of average goodwill and other intangibles(89,406) (44,579) (45,100) (45,617) (46,157)
Average tangible common equity$527,650 $514,982 $512,265 $501,221 $496,287


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(1)The financial measures of tangible book value per common share and average tangible common equity included in this press release are financial measures that are not recognized by generally accepted accounting principles in the United States, or GAAP. These non-GAAP measures exclude the effect of the period end or average balance of intangible assets. Management believes that these non-GAAP measures provide additional useful information, particularly since these measures are widely used by industry analysts for companies with prior merger and acquisition activities, such as us.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure is presented in the table above. 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 a substitute for GAAP financial measures, and we strongly encourage 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