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State Bank Financial Corporation Reports Third Quarter 2017 Financial Results

  • Third quarter 2017 net income of $14.4 million, or $.37 per diluted share
  • Return on average assets of 1.37% in the third quarter of 2017
  • Completed AloStar Bank of Commerce merger transaction on September 30, 2017, less than four months after announcement
  • Proactive expense management led to third quarter efficiency ratio of 58.45%
  • Average noninterest-bearing deposit growth of $32 million, or 3.3%, quarter over quarter

ATLANTA, Oct. 26, 2017 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the third quarter ended September 30, 2017. Net income for the third quarter of 2017 was $14.4 million, compared to $15.2 million in the second quarter of 2017 and $12.4 million in the third quarter of 2016. The linked-quarter decline was primarily attributable to a reduction in loan recovery income of $2.3 million. Fully diluted earnings per share were $.37 in the third quarter of 2017, compared to $.39 in the second quarter of 2017 and $.34 in the third quarter of 2016.

Joe Evans, Chairman of State Bank Financial, commented, “I am extremely pleased with our team’s ability to promptly close the meaningfully accretive AloStar transaction in the third quarter. I look forward to closing out 2017 with a full quarter of AloStar's earnings on top of what was already shaping up to be an outstanding year for State Bank. AloStar brings a talented team with deep industry knowledge and a robust pipeline that will help us jumpstart 2018.”

Operating Highlights

Interest income on loans improved to $35.4 million in the third quarter of 2017, a $528,000 increase from the second quarter of 2017 and an $8.8 million increase from the third quarter of 2016. Net interest income of $44.3 million in the third quarter of 2017 decreased from $46.5 million in the second quarter of 2017 but increased from $38.1 million in the third quarter of 2016. Accretion income on loans was $6.5 million in the third quarter of 2017, down from $9.2 million in the second quarter of 2017 and $9.3 million in the third quarter of 2016. As of September 30, 2017, approximately $67 million of accretable discount remains to be recognized as loan accretion income.

Noninterest income was $9.7 million in the third quarter of 2017, compared to $10.5 million in the second quarter of 2017 and $9.8 million in the third quarter of 2016. Revenues in mortgage and SBA declined $303,000 and $519,000, respectively, in the third quarter of 2017, compared to the second quarter of 2017 while payroll and insurance income increased $69,000.

Total noninterest expense for the third quarter of 2017 was $31.6 million, compared to $32.0 million in the second quarter of 2017 and $28.5 million in the third quarter of 2016. The $426,000 linked-quarter decrease was primarily due to lower commission, incentive, and employee benefits costs, which were down $421,000 from the previous quarter due to lower production levels in noninterest income lines.

Financial Condition

Comparison of period-end balance sheet metrics for the quarter ended September 30, 2017 to prior periods is materially affected by the acquisition of AloStar Bank of Commerce, which was completed on September 30, 2017. Average balance sheet metrics for the quarter were not impacted by the acquisition.

Total assets at September 30, 2017, were $5.1 billion, up from $4.2 billion at June 30, 2017. Total loans were $3.6 billion at September 30, 2017, up $691.8 million from the second quarter of 2017 due to $718.6 million of loans acquired from AloStar Bank of Commerce. Period-end organic loans increased to $2.3 billion at September 30, 2017, an increase of $29.2 million from the second quarter of 2017. Purchased non-credit impaired and purchased credit impaired loans, excluding the AloStar acquisition, decreased to $549.6 million at the end of the third quarter of 2017, a $55.9 million linked-quarter decline.

Tom Wiley, Vice Chairman and CEO, commented “Reporting $14.4 million in net income for the quarter reflects the increasingly strong performance of the core bank. The fundamental trends remain strong, our team is intently focused on delivering an exceptional experience for our clients, and we are very excited about the complementary opportunity AloStar represents for the future of our combined franchise.”

Credit quality metrics remain solid at September 30, 2017. Past due organic and purchased non-credit impaired loans were .12% and .48% of their respective portfolios. The provision for loan losses on organic and purchased non-credit impaired loans was $1.3 million in the third quarter of 2017 and was primarily attributable to net charge-offs, organic loan growth, and continued seasoning of the purchased non-credit impaired portfolio. The organic allowance as a percent of organic loans was .99% at the end of the third quarter of 2017.

Total deposits at September 30, 2017, were $4.2 billion, up $788.4 million from $3.5 billion at June 30, 2017, including $705.6 million of deposits acquired from AloStar Bank of Commerce. Period-end transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $198.3 million from the second quarter of 2017 inclusive of the acquisition. Noninterest-bearing demand deposits represented 27.8% of total deposits as of September 30, 2017. Average noninterest-bearing demand deposits were $1.0 billion, a $32.0 million increase from the second quarter of 2017 and a $181.0 million increase from the third quarter of 2016.

Tangible book value per share was $14.01 at the end of the third quarter of 2017. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 13.37% and a Tier I risk-based capital ratio of 12.21%.

Detailed Results

Supplemental tables displaying financial results for the third quarter of 2017, the previous four quarters and year-to-date 2017 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 3Q17 Financial Supplement: Table 8, Reconciliation of Non-GAAP Measures.

Conference Call

Chairman Joe Evans, Chief Executive Officer Tom Wiley, Chief Financial Officer and Chief Operating 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: 1.800.630.4153

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 $5.1 billion in assets as of September 30, 2017, is an Atlanta-based bank holding company for State Bank and Trust Company. State Bank operates a full service banking business and offers a broad range of commercial and retail banking products to our customers throughout 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, our expectation that the AloStar Bank of Commerce transaction will meaningfully enhance our earnings through significant earnings accretion, and statements regarding the impact of AloStar's pipeline on our future performance. 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, the conversion of AloStar's operating systems and procedures may take longer than anticipated or may be more costly than anticipated or have unanticipated adverse results relating to the Company's or AloStar's existing businesses, the anticipated benefits of the AloStar transaction, including anticipated cost savings and strategic gains, may be significantly harder or take longer to achieve than expected or may not be achieved in their entirety as a result of unexpected factors or events, 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
3Q17 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
3Q17 change vs
(Dollars in thousands, except per share amounts) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
Income Statement Highlights
Interest income on loans $35,400 $34,872 $34,060 $26,696 $26,580 $528 $8,820
Accretion income on loans 6,520 9,228 7,677 10,271 9,335 (2,708) (2,815)
Interest income on invested funds 5,782 5,747 5,460 4,810 4,714 35 1,068
Total interest income 47,702 49,847 47,197 41,777 40,629 (2,145) 7,073
Interest expense 3,370 3,369 3,239 2,631 2,504 1 866
Net interest income 44,332 46,478 43,958 39,146 38,125 (2,146) 6,207
Provision for loan and lease losses
(organic & PNCI loans)
1,300 1,470 1,361 300 7 (170) 1,293
Provision for loan and lease losses
(purchased credit impaired loans)
(885) 375 (359) (23) 81 (1,260) (966)
Provision for loan and lease losses 415 1,845 1,002 277 88 (1,430) 327
Total noninterest income 9,682 10,476 9,459 9,911 9,769 (794) (87)
Total noninterest expense 31,571 31,997 34,565 32,875 28,480 (426) 3,091
Income before income taxes 22,028 23,112 17,850 15,905 19,326 (1,084) 2,702
Income tax expense 7,592 7,909 6,292 5,578 6,885 (317) 707
Net income $14,436 $15,203 $11,558 $10,327 $12,441 $(767) $1,995
Common Share Data
Basic earnings per share $.37 $.39 $.30 $.28 $.34 $(.02) $.03
Diluted earnings per share .37 .39 .30 .28 .34 (.02) .03
Cash dividends declared per share .14 .14 .14 .14 .14
Book value per share 16.48 16.23 15.96 15.80 15.21 .25 1.27
Tangible book value per share (1) 14.01 13.94 13.66 13.48 13.99 .07 .02
Market price per share (quarter end) 28.65 27.12 26.12 26.86 22.82 1.53 5.83
Common Shares Outstanding
Common stock 38,991,022 38,967,972 38,870,424 38,845,573 36,894,553 23,050 2,096,469
Weighted average shares outstanding:
Basic 37,918,753 37,896,125 37,867,718 35,904,009 35,863,183 22,628 2,055,570
Diluted 37,963,141 37,942,483 37,954,585 36,009,098 35,965,948 20,658 1,997,193
Average Balance Sheet Highlights
Loans $2,893,187 $2,905,415 $2,846,571 $2,431,512 $2,406,629 $(12,228) $486,558
Assets 4,178,731 4,200,843 4,181,961 3,636,544 3,564,860 (22,112) 613,871
Deposits 3,437,329 3,413,831 3,423,506 2,975,510 2,866,822 23,498 570,507
Equity 638,620 627,294 617,009 559,561 557,365 11,326 81,255
Tangible equity (1) 550,002 538,153 527,603 514,982 512,265 11,849 37,737


State Bank Financial Corporation
3Q17 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
3Q17 change vs
(Dollars in thousands, except per share
amounts)
3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
Key Metrics (2)
Return on average assets 1.37% 1.45% 1.12% 1.13% 1.39% (.08)% (.02)%
Return on average equity 8.97 9.72 7.60 7.34 8.88 (.75) .09
Yield on earning assets 4.85 5.11 4.93 4.87 4.84 (.26) .01
Cost of funds .38 .38 .37 .35 .34 .04
Rate on interest-bearing liabilities .54 .53 .52 .49 .47 .01 .07
Net interest margin 4.51 4.76 4.59 4.56 4.54 (.25) (.03)
Leverage ratio (3) 13.37 13.23 13.04 14.90 14.64 .14 (1.27)
Tier I risk-based capital ratio (3) 12.21 15.01 14.74 14.78 16.68 (2.80) (4.47)
Total risk-based capital ratio (3) 12.81 15.79 15.49 15.52 17.56 (2.98) (4.75)
Efficiency ratio (4) 58.45 56.18 64.71 67.01 59.46 2.27 (1.01)
Average loans to average deposits 84.17 85.11 83.15 81.72 83.95 (.94) .22
Noninterest-bearing deposits to total
deposits
27.82 29.24 27.71 28.69 30.09 (1.42) (2.27)

(1) Denotes a non-GAAP financial measure. See Reconciliation of Non-GAAP Measures (Table 8) for further information.
(2) Income statement ratios and yield/rate information are annualized for the applicable period.
(3) Current period capital ratios are estimated as of the date of this earnings release.
(4) Noninterest expense divided by net interest income plus noninterest income.

State Bank Financial Corporation
3Q17 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
Assets
Cash and amounts due from depository institutions $14,235 $11,284 $12,101 $13,219 $10,648 $2,951 $3,587
Interest-bearing deposits in other financial institutions 251,115 126,390 62,222 132,851 103,122 124,725 147,993
Federal funds sold 16,889 3,523 16,889 16,889
Cash and cash equivalents 282,239 137,674 74,323 149,593 113,770 144,565 168,469
Investment securities available-for-sale 920,763 847,795 896,297 847,178 822,655 72,968 98,108
Investment securities held-to-maturity 57,867 63,104 67,053 67,063 67,071 (5,237) (9,204)
Loans 3,572,790 2,881,000 2,854,780 2,814,572 2,346,346 691,790 1,226,444
Allowance for loan and lease losses (26,842) (27,988) (26,976) (26,598) (27,177) 1,146 335
Loans, net 3,545,948 2,853,012 2,827,804 2,787,974 2,319,169 692,936 1,226,779
Loans held-for-sale 47,743 48,895 51,380 52,169 63,852 (1,152) (16,109)
Other real estate owned 1,271 2,407 3,759 10,897 10,609 (1,136) (9,338)
Premises and equipment, net 52,120 51,170 51,535 52,056 42,009 950 10,111
Goodwill 84,564 77,476 77,084 77,084 36,357 7,088 48,207
Other intangibles, net 11,755 11,599 12,054 12,749 8,515 156 3,240
SBA servicing rights 3,950 3,828 3,547 3,477 3,275 122 675
Bank-owned life insurance 66,846 66,320 65,855 65,371 60,282 526 6,564
Other assets 73,417 70,697 71,990 99,654 69,211 2,720 4,206
Total assets $5,148,483 $4,233,977 $4,202,681 $4,225,265 $3,616,775 $914,506 $1,531,708
Liabilities and Shareholders’
Equity
Noninterest-bearing deposits $1,179,698 $1,009,509 $944,838 $984,419 $890,588 $170,189 $289,110
Interest-bearing deposits 3,061,387 2,443,183 2,464,937 2,446,746 2,068,704 618,204 992,683
Total deposits 4,241,085 3,452,692 3,409,775 3,431,165 2,959,292 788,393 1,281,793
Federal funds purchased and
securities sold under
agreements to repurchase
25,499 25,256 25,056 27,673 20,124 243 5,375
FHLB borrowings 80,000 100,000 47,014 20,000 (80,000) (20,000)
Notes payable 398 398 398 398 398
Other liabilities 238,911 43,294 47,169 105,382 55,827 195,617 183,084
Total liabilities 4,505,893 3,601,640 3,582,398 3,611,632 3,055,641 904,253 1,450,252
Total shareholders’ equity 642,590 632,337 620,283 613,633 561,134 10,253 81,456
Total liabilities and
shareholders’ equity
$5,148,483 $4,233,977 $4,202,681 $4,225,265 $3,616,775 $914,506 $1,531,708
Capital Ratios (1)
Average equity to average assets 15.28% 14.93% 14.75% 15.39% 15.63% .35% (.35)%
Leverage ratio 13.37 13.23 13.04 14.90 14.64 .14 (1.27)
CET1 risk-based capital ratio 12.21 15.01 14.74 14.78 16.68 (2.80) (4.47)
Tier I risk-based capital ratio 12.21 15.01 14.74 14.78 16.68 (2.80) (4.47)
Total risk-based capital ratio 12.81 15.79 15.49 15.52 17.56 (2.98) (4.75)

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

State Bank Financial Corporation
3Q17 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
3Q17 change vs
(Dollars in thousands, except per share amounts) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
Net Interest Income:
Interest income on loans $35,400 $34,872 $34,060 $26,696 $26,580 $528 $8,820
Accretion income on loans 6,520 9,228 7,677 10,271 9,335 (2,708) (2,815)
Interest income on invested funds 5,782 5,747 5,460 4,810 4,714 35 1,068
Interest expense 3,370 3,369 3,239 2,631 2,504 1 866
Net interest income 44,332 46,478 43,958 39,146 38,125 (2,146) 6,207
Provision for loan and lease losses
(organic & PNCI loans)
1,300 1,470 1,361 300 7 (170) 1,293
Provision for loan and lease losses
(purchased credit impaired loans)
(885) 375 (359) (23) 81 (1,260) (966)
Provision for loan and lease losses 415 1,845 1,002 277 88 (1,430) 327
Net interest income after provision
for loan and lease losses
43,917 44,633 42,956 38,869 38,037 (716) 5,880
Noninterest Income:
Service charges on deposits 1,575 1,471 1,467 1,319 1,383 104 192
Mortgage banking income 2,793 3,096 2,894 2,511 3,216 (303) (423)
Payroll and insurance income 1,487 1,418 1,495 1,528 1,297 69 190
SBA income 1,464 1,983 1,178 1,718 1,553 (519) (89)
ATM income 826 864 832 735 759 (38) 67
Bank-owned life insurance income 526 465 484 467 533 61 (7)
Gain on sale of investment securities 3 13 12 42 38 (10) (35)
Other 1,008 1,166 1,097 1,591 990 (158) 18
Total noninterest income 9,682 10,476 9,459 9,911 9,769 (794) (87)
Noninterest Expense:
Salaries and employee benefits 21,457 21,912 22,057 19,554 19,799 (455) 1,658
Occupancy and equipment 3,187 3,329 3,280 3,069 2,984 (142) 203
Data processing 2,587 2,382 2,639 2,131 2,097 205 490
Legal and professional fees 700 898 1,805 1,702 1,064 (198) (364)
Merger-related expenses 135 372 2,235 3,507 135 (237)
Marketing 342 403 664 430 665 (61) (323)
Federal deposit insurance premiums
and other regulatory fees
407 398 397 188 441 9 (34)
Loan collection costs and OREO
activity
181 (213) (1,042) (127) (841) 394 1,022
Amortization of intangibles 701 697 696 516 513 4 188
Other 1,874 1,819 1,834 1,905 1,623 55 251
Total noninterest expense 31,571 31,997 34,565 32,875 28,480 (426) 3,091
Income Before Income Taxes 22,028 23,112 17,850 15,905 19,326 (1,084) 2,702
Income tax expense 7,592 7,909 6,292 5,578 6,885 (317) 707
Net Income $14,436 $15,203 $11,558 $10,327 $12,441 $(767) $1,995
Net income allocated to participating
securities
$389 $413 $295 $282 $348 $(24) $41
Net income allocated to common
shareholders
14,047 14,790 11,263 10,045 12,093 (743) 1,954
Earnings Per Share
Basic $.37 $.39 $.30 $.28 $.34 $(.02) $.03
Diluted .37 .39 .30 .28 .34 (.02) .03
Weighted Average Shares Outstanding
Basic 37,918,753 37,896,125 37,867,718 35,904,009 35,863,183 22,628 2,055,570
Diluted 37,963,141 37,942,483 37,954,585 36,009,098 35,965,948 20,658 1,997,193



State Bank Financial Corporation
3Q17 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) 2017 2016
Net Interest Income:
Interest income on loans $104,332 $76,328 $28,004
Accretion income on loans 23,425 33,039 (9,614)
Interest income on invested funds 16,989 14,113 2,876
Interest expense 9,978 6,988 2,990
Net interest income 134,768 116,492 18,276
Provision for loan and lease losses (organic & PNCI loans) 4,131 3,296 835
Provision for loan and lease losses (purchased credit impaired loans) (869) (3,336) 2,467
Provision for loan and lease losses 3,262 (40) 3,302
Net interest income after provision for loan and lease losses 131,506 116,532 14,974
Noninterest Income:
Service charges on deposits 4,513 4,121 392
Mortgage banking income 8,783 9,808 (1,025)
Payroll and insurance income 4,400 4,097 303
SBA income 4,625 4,740 (115)
ATM income 2,522 2,273 249
Bank-owned life insurance income 1,475 1,463 12
Gain on sale of investment securities 28 447 (419)
Other 3,271 2,441 830
Total noninterest income 29,617 29,390 227
Noninterest Expense:
Salaries and employee benefits 65,426 59,221 6,205
Occupancy and equipment 9,796 9,100 696
Data processing 7,608 6,383 1,225
Legal and professional fees 3,403 2,993 410
Merger-related expenses 2,742 454 2,288
Marketing 1,409 1,786 (377)
Federal deposit insurance premiums and other regulatory fees 1,202 1,556 (354)
Loan collection costs and OREO activity (1,074) (452) (622)
Amortization of intangibles 2,094 1,586 508
Other 5,527 5,425 102
Total noninterest expense 98,133 88,052 10,081
Income Before Income Taxes 62,990 57,870 5,120
Income tax expense 21,793 20,606 1,187
Net Income $41,197 $37,264 $3,933
Net income allocated to participating securities $1,095 $1,021 $74
Net income allocated to common shareholders 40,102 36,243 3,859
Earnings Per Share
Basic $1.06 $1.01 $.05
Diluted 1.06 1.01 .05
Weighted Average Shares Outstanding
Basic 37,894,385 35,940,402 1,953,983
Diluted 37,943,971 36,040,655 1,903,316


State Bank Financial Corporation
3Q17 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
Composition of Loans
Organic loans (1):
Construction, land & land development $460,368 $413,557 $418,186 $500,018 $486,299 $46,811 $(25,931)
Other commercial real estate 915,727 960,762 885,570 754,790 744,270 (45,035) 171,457
Total commercial real estate 1,376,095 1,374,319 1,303,756 1,254,808 1,230,569 1,776 145,526
Residential real estate 175,258 167,755 161,460 144,295 139,926 7,503 35,332
Owner-occupied real estate 261,784 244,637 251,703 256,317 239,726 17,147 22,058
Commercial, financial & agricultural 363,551 355,629 336,257 327,381 306,141 7,922 57,410
Leases 66,765 73,103 62,603 71,724 74,722 (6,338) (7,957)
Consumer 61,200 60,028 56,776 36,039 39,373 1,172 21,827
Total organic loans 2,304,653 2,275,471 2,172,555 2,090,564 2,030,457 29,182 274,196
Purchased non-credit impaired loans (2):
Construction, land & land development 30,670 31,083 43,787 51,208 10,035 (413) 20,635
Other commercial real estate 234,486 171,914 188,737 209,531 58,261 62,572 176,225
Total commercial real estate 265,156 202,997 232,524 260,739 68,296 62,159 196,860
Residential real estate 112,244 117,449 137,699 144,596 56,468 (5,205) 55,776
Owner-occupied real estate 125,438 114,438 119,871 115,566 52,016 11,000 73,422
Commercial, financial & agricultural 558,992 31,654 33,690 36,206 10,447 527,338 548,545
Consumer 2,647 3,393 4,281 6,255 1,826 (746) 821
Total purchased non-credit impaired
loans
1,064,477 469,931 528,065 563,362 189,053 594,546 875,424
Purchased credit impaired loans (3):
Construction, land & land development 16,918 16,857 17,211 16,537 11,564 61 5,354
Other commercial real estate 102,934 46,078 60,664 60,742 38,238 56,856 64,696
Total commercial real estate 119,852 62,935 77,875 77,279 49,802 56,917 70,050
Residential real estate 42,190 45,513 49,728 54,507 53,953 (3,323) (11,763)
Owner-occupied real estate 26,210 23,262 22,099 23,980 22,389 2,948 3,821
Commercial, financial & agricultural 15,139 3,617 4,153 4,533 608 11,522 14,531
Consumer 269 271 305 347 84 (2) 185
Total purchased credit impaired
loans
203,660 135,598 154,160 160,646 126,836 68,062 76,824
Total loans $3,572,790 $2,881,000 $2,854,780 $2,814,572 $2,346,346 $691,790 $1,226,444
Composition of Deposits
Noninterest-bearing demand deposits $1,179,698 $1,009,509 $944,838 $984,419 $890,588 $170,189 $289,110
Interest-bearing transaction accounts 619,156 591,038 599,858 664,350 547,078 28,118 72,078
Savings and money market deposits 1,680,922 1,373,686 1,393,711 1,292,867 1,101,458 307,236 579,464
Time deposits 731,416 419,020 454,889 466,849 390,429 312,396 340,987
Brokered and wholesale time deposits 29,893 59,439 16,479 22,680 29,739 (29,546) 154
Total deposits $4,241,085 $3,452,692 $3,409,775 $3,431,165 $2,959,292 $788,393 $1,281,793

(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, S Bank, and AloStar.
(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
3Q17 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
Allowance for loan and lease losses on
organic loans
Beginning Balance $22,560 $21,885 $21,086 $21,736 $22,008 $675 $552
Charge-offs (912) (536) (540) (553) (311) (376) (601)
Recoveries 106 113 77 34 39 (7) 67
Net (charge-offs) recoveries (806) (423) (463) (519) (272) (383) (534)
Provision for loan and lease losses 955 1,098 1,262 (131) (143) 955
Ending Balance $22,709 $22,560 $21,885 $21,086 $21,736 $149 $973
Allowance for loan and lease losses on
purchased non-credit impaired loans
Beginning Balance $667 $491 $439 $150 $158 $176 $509
Charge-offs (152) (197) (48) (143) (16) 45 (136)
Recoveries 40 1 1 1 1 39 39
Net (charge-offs) recoveries (112) (196) (47) (142) (15) 84 (97)
Provision for loan and lease losses 345 372 99 431 7 (27) 338
Ending Balance $900 $667 $491 $439 $150 $233 $750
Allowance for loan and lease losses on
purchased credit impaired loans
Beginning Balance $4,761 $4,600 $5,073 $5,291 $5,433 $161 $(672)
Charge-offs (643) (214) (114) (195) (223) (429) (420)
Recoveries
Net (charge-offs) recoveries (643) (214) (114) (195) (223) (429) (420)
Provision for loan and lease losses (885) 375 (359) (23) 81 (1,260) (966)
Ending Balance $3,233 $4,761 $4,600 $5,073 $5,291 $(1,528) $(2,058)
Nonperforming organic assets
Nonaccrual loans $5,483 $1,422 $6,114 $6,234 $6,423 $4,061 $(940)
Total nonperforming organic loans 5,483 1,422 6,114 6,234 6,423 4,061 (940)
Other real estate owned 23 232 282 83 (23) (83)
Total nonperforming organic assets $5,483 $1,445 $6,346 $6,516 $6,506 $4,038 $(1,023)
Nonperforming purchased non-credit
impaired assets
Nonaccrual loans $5,614 $5,141 $4,098 $3,381 $1,672 $473 $3,942
Total nonperforming PNCI loans 5,614 5,141 4,098 3,381 1,672 473 3,942
Other real estate owned 21 (21)
Total nonperforming PNCI assets $5,614 $5,141 $4,098 $3,381 $1,693 $473 $3,921
Ratios for organic assets
Annualized QTD charge-offs
(recoveries) on organic loans to
average organic loans
.14% .08% .09% .10% .05% .06% .09%
Nonperforming organic loans to organic
loans
.24 .06 .28 .30 .32 .18 (.08)
Nonperforming organic assets to organic
loans + OREO
.24 .06 .29 .31 .32 .18 (.08)
Past due organic loans to organic loans .12 .09 .08 .06 .09 .03 .03
Allowance for loan and lease losses on
organic loans to organic loans
.99 .99 1.01 1.01 1.07 (.08)
State Bank Financial Corporation
3Q17 Financial Supplement: Table 6 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
Ratios for purchased non-credit
impaired loans
Annualized QTD charge-offs
(recoveries) on PNCI loans to average
PNCI loans
.10% .16% .03% .31% .03% (.06) % .07%
Nonperforming PNCI loans to PNCI
loans
.53 1.09 .78 .60 .88 (.56) (.35)
Nonperforming PNCI assets to PNCI
loans + OREO
.53 1.09 .78 .60 .90 (.56) (.37)
Past due PNCI loans to PNCI loans .48 1.05 .90 .68 .41 (.57) .07
Allowance for loan and lease losses on
PNCI loans to PNCI loans
.08 .14 .09 .08 .08 (.06)
Ratios for purchased credit impaired
loans (1)
Annualized QTD charge-offs
(recoveries) on PCI loans to average
PCI loans
1.95% .60% .30% .63% .68% 1.35% 1.27%
Past due PCI loans to PCI loans 8.12 10.26 10.68 8.92 11.00 (2.14) (2.88)
Allowance for loan and lease losses on
PCI loans to PCI loans
1.59 3.51 2.98 3.16 4.17 (1.92) (2.58)

(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
3Q17 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
3Q17 change vs
(Dollars in thousands) 3Q17 2Q17 1Q17 4Q16 3Q16 2Q17 3Q16
Average Balances
Interest-bearing deposits in other
financial institutions and federal funds
sold
$108,546 $73,862 $85,720 $82,797 $63,315 $34,684 $45,231
Investment securities 913,898 947,300 961,913 911,025 881,642 (33,402) 32,256
Loans, excluding purchased credit
impaired (1)
2,762,479 2,762,996 2,692,517 2,307,794 2,275,859 (517) 486,620
Purchased credit impaired loans 130,708 142,419 154,054 123,718 130,770 (11,711) (62)
Total earning assets 3,915,631 3,926,577 3,894,204 3,425,334 3,351,586 (10,946) 564,045
Total nonearning assets 263,100 274,266 287,757 211,210 213,274 (11,166) 49,826
Total assets 4,178,731 4,200,843 4,181,961 3,636,544 3,564,860 (22,112) 613,871
Interest-bearing transaction accounts 580,090 585,343 602,378 575,977 515,974 (5,253) 64,116
Savings & money market deposits 1,383,326 1,380,586 1,388,876 1,118,548 1,105,635 2,740 277,691
Time deposits 420,192 437,475 456,811 385,146 401,447 (17,283) 18,745
Brokered and wholesale time deposits 49,675 38,353 19,926 22,885 20,723 11,322 28,952
Other borrowings 57,988 119,652 81,344 52,555 94,455 (61,664) (36,467)
Total interest-bearing liabilities 2,491,271 2,561,409 2,549,335 2,155,111 2,138,234 (70,138) 353,037
Noninterest-bearing deposits 1,004,046 972,074 955,515 872,954 823,043 31,972 181,003
Other liabilities 44,794 40,066 60,102 48,918 46,218 4,728 (1,424)
Shareholders’ equity 638,620 627,294 617,009 559,561 557,365 11,326 81,255
Total liabilities and shareholders'
equity
4,178,731 4,200,843 4,181,961 3,636,544 3,564,860 (22,112) 613,871
Interest Margins (2)
Interest-bearing deposits in other
financial institutions and federal funds
sold
.80% .50% .44% .31% .28% .30% .52%
Investment securities, tax-equivalent
basis
2.42 2.39 2.26 2.07 2.11 .03 .31
Loans, excluding purchased credit
impaired, tax-equivalent basis (3)
5.11 5.08 5.15 4.63 4.67 .03 .44
Purchased credit impaired loans 19.79 25.99 20.21 33.03 28.40 (6.20) (8.61)
Total earning assets 4.85% 5.11% 4.93% 4.87% 4.84% (.26)% .01%
Interest-bearing transaction accounts .13 .12 .12 .12 .12 .01 .01
Savings & money market deposits .63 .61 .60 .59 .54 .02 .09
Time deposits .72 .69 .72 .72 .68 .03 .04
Brokered and wholesale time deposits 1.05 1.05 1.06 .85 .92 .13
Other borrowings .76 .82 .65 .45 .40 (.06) .36
Total interest-bearing liabilities .54% .53% .52% .49% .47% .01% .07%
Net interest spread 4.31% 4.58% 4.41% 4.38% 4.37% (.27)% (.06)%
Net interest margin 4.51% 4.76% 4.59% 4.56% 4.54% (.25)% (.03)%
Net interest margin contribution
from accretion income on loans
.66% .94% .80% 1.19% 1.11% (.28)% (.45)%

(1) Includes average nonaccrual loans of $8.0 million for 3Q17, $9.3 million for 2Q17, $9.9 million for 1Q17, $8.4 million for 4Q16, and $8.6 million for 3Q16.
(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 tax-exempt loan interest income to a fully taxable basis. The taxable equivalent adjustments included above amount to $177,000 for 3Q17, $131,000 for 2Q17, $140,000 for 1Q17, $142,000 for 4Q16, and $142,000 for 3Q16.


State Bank Financial Corporation
3Q17 Financial Supplement: Table 8
Reconciliation of Non-GAAP Measures (1)
Quarterly (Unaudited)
(dollars in thousands, except per share amounts; taxable
equivalent
)
3Q17 2Q17 1Q17 4Q16 3Q16
Book value per common share reconciliation
Book value per common share (GAAP)$16.48 $16.23 $15.96 $15.80 $15.21
Effect of goodwill and other intangibles(2.47) (2.29) (2.30) (2.32) (1.22)
Tangible book value per common share$14.01 $13.94 $13.66 $13.48 $13.99
Average tangible equity reconciliation
Average equity (GAAP)$638,620 $627,294 $617,009 $559,561 $557,365
Effect of average goodwill and other intangibles(88,618) (89,141) (89,406) (44,579) (45,100)
Average tangible equity$550,002 $538,153 $527,603 $514,982 $512,265

(1) Certain financial measures included in this press release, tangible book value per common share and average tangible equity, are financial measures that are not recognized by generally accepted accounting principles in the United States, or GAAP. These non-GAAP financial measures exclude the effect of the period end or average balance of intangible assets. Management believes that these non-GAAP financial measures provides additional useful information to investors, particularly since these measure 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: Sheila Ray 404.239.8684 / sheila.ray@statebt.com

Source:State Bank Financial Corporation.