State Bank Financial Corporation Reports Fourth Quarter and Full Year 2017 Financial Results

2017 Highlights

  • Record full year pretax income of $87.6 million
  • Non-cash revaluation charge on our net deferred tax assets of $10.7 million, or $.27 per fully diluted share, in the fourth quarter
  • Interest income on loans and invested funds increased $52.3 million year over year
  • Noninterest-bearing deposit growth of $102.7 million, or 10.4% year over year, excluding the AloStar acquisition
  • Announced and completed the AloStar Bank of Commerce merger transaction
  • $.52 of tangible book value growth in 2017

ATLANTA, Jan. 25, 2018 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the fourth quarter and full year ended December 31, 2017. Full year net income for 2017 was $46.6 million, or $1.19 per fully diluted share, compared to $47.6 million, or $1.28 per fully diluted share, for full year 2016. Net income for the fourth quarter of 2017 was $5.4 million, compared to $14.4 million in the third quarter of 2017 and $10.3 million in the fourth quarter of 2016. Fully diluted earnings per share were $.14 in the fourth quarter of 2017, compared to $.37 in the third quarter of 2017 and $.28 in the fourth quarter of 2016. Net income for the fourth quarter and full year ended December 31, 2017 includes the impact of a $10.7 million non-cash tax expense on tax reform and merger election related revaluation of our net deferred tax assets and $911,000 in after tax securities losses related to an investment portfolio restructure. Additionally, after tax merger expenses of $1.6 million and $3.3 million were included in our results for the quarter and year ended December 31, 2017, respectively.

Income before income taxes for 2017 was $87.6 million compared to $73.8 million for full year 2016. Income before income taxes for the fourth quarter of 2017 was $24.6 million, compared to $22.0 million in the third quarter of 2017 and $15.9 million in the fourth quarter of 2016. The annual and linked-quarter increases were primarily attributable to an increase in net interest income, partially offset by an increase in noninterest expenses, both of which related to the AloStar Bank of Commerce acquisition.

Joe Evans, Chairman of State Bank Financial, commented, “2017 was a great year for State Bank by any measure. With the completion of a significant, immediately accretive acquisition and our continued focus on expense control and margin management, we grew pretax income 18.8% over the prior year. Further, we believe our strong finish in 2017 has set the stage for another solid year in 2018.”

Operating Highlights

Interest income on loans improved to $46.9 million in the fourth quarter of 2017, an $11.5 million increase from the third quarter of 2017 and a $20.2 million increase from the fourth quarter of 2016. Net interest income of $58.0 million in the fourth quarter of 2017 increased from $44.3 million in the third quarter of 2017 and $39.1 million in the fourth quarter of 2016. Accretion income on loans was $10.7 million in the fourth quarter of 2017, up from $6.5 million in the third quarter of 2017 and $10.3 million in the fourth quarter of 2016. The $4.2 million linked-quarter increase was primarily due to unexpected acceleration of certain purchased credit impaired loan payoffs. As of December 31, 2017, approximately $58 million of accretable discount remains to be recognized as loan accretion income.

Noninterest income was $10.1 million in the fourth quarter of 2017, compared to $9.7 million in the third quarter of 2017 and $9.9 million in the fourth quarter of 2016. Revenues in SBA and payroll and insurance increased $402,000 and $211,000, respectively, in the fourth quarter of 2017, compared to the third quarter of 2017, while mortgage banking income decreased $235,000. Loss on sale of securities was $1.5 million in the fourth quarter of 2017, as we opportunistically restructured our portfolio and sold certain lower yielding securities in a loss position and reinvested into higher yielding securities.

Total noninterest expense for the fourth quarter of 2017 was $40.7 million, compared to $31.6 million in the third quarter of 2017 and $32.9 million in the fourth quarter of 2016. The $9.1 million linked-quarter increase was primarily due to $7.8 million of noninterest expense related to the AloStar Bank of Commerce acquisition.

Financial Condition

Total assets at December 31, 2017, were $5.0 billion, down from $5.1 billion at September 30, 2017. Total loans were $3.5 billion at December 31, 2017, down $40.6 million from the third quarter of 2017. Period-end organic loans increased to $2.4 billion at December 31, 2017, an increase of $61.2 million from the third quarter of 2017. Purchased non-credit impaired loans decreased to $990.7 million at December 31, 2017, a $73.7 million linked-quarter decline. Purchased credit impaired loans decreased to $175.6 million at December 31, 2017, a $28.0 million linked-quarter decline.

Past due organic and purchased non-credit impaired loans were .20% and .40% of their respective portfolios at December 31, 2017. The provision for loan losses on organic and purchased non-credit impaired loans was $2.1 million in the fourth 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 1.02% at the end of the fourth quarter of 2017.

Total deposits at December 31, 2017, were $4.2 billion, up $2.1 million from September 30, 2017. Period-end transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $80.4 million from the third quarter of 2017. Noninterest-bearing demand deposits represented 28.1% of total deposits as of December 31, 2017. Average noninterest-bearing demand deposits were $1.1 billion, a $143.8 million increase from the third quarter of 2017 and a $274.9 million increase from the fourth quarter of 2016.

Tom Wiley, Vice Chairman and CEO, commented “After a record setting year in 2017, I’m even more optimistic about our prospects for 2018. Benefits from the full integration of the AloStar acquisition, tax reform and economic trends in our core markets should all be positive catalysts for State Bank. Our strategic priorities remain intently focused on taking extraordinary care of our clients, continuing to build our core deposit base, being disciplined risk managers and growing earnings per share.”

Tangible book value per share was $14.00 at the end of the fourth quarter of 2017. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 11.24% and a Tier I risk-based capital ratio of 12.61%.

Detailed Results

Supplemental tables displaying financial results for the fourth quarter of 2017, the previous four quarters, and full year 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 4Q17 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 10:00 a.m. ET.

Dial in number: 1.800.699.3428

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 $5.0 billion in assets as of December 31, 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 prospects for 2018, including the benefits of the full integration of the AloStar Bank of Commerce acquisition, tax reform and economic trends in our core markets, our ability to continue to build our core deposit base, manage risk and grow earnings per share. 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
4Q17 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
4Q17 change vs
(Dollars in thousands, except per share amounts) 4Q17 3Q17 2Q17 1Q17 4Q16 3Q17 4Q16
Income Statement Highlights
Interest income on loans $46,926 $35,400 $34,872 $34,060 $26,696 $11,526 $20,230
Accretion income on loans 10,671 6,520 9,228 7,677 10,271 4,151 400
Interest income on invested funds 6,034 5,782 5,747 5,460 4,810 252 1,224
Total interest income 63,631 47,702 49,847 47,197 41,777 15,929 21,854
Interest expense 5,614 3,370 3,369 3,239 2,631 2,244 2,983
Net interest income 58,017 44,332 46,478 43,958 39,146 13,685 18,871
Provision for loan and lease losses (organic & PNCI loans) 2,050 1,300 1,470 1,361 300 750 1,750
Provision for loan and lease losses (purchased credit impaired loans) 798 (885) 375 (359) (23) 1,683 821
Provision for loan and lease losses 2,848 415 1,845 1,002 277 2,433 2,571
Total noninterest income 10,140 9,682 10,476 9,459 9,911 458 229
Total noninterest expense 40,684 31,571 31,997 34,565 32,875 9,113 7,809
Income before income taxes 24,625 22,028 23,112 17,850 15,905 2,597 8,720
Income tax expense 19,248 7,592 7,909 6,292 5,578 11,656 13,670
Net income $5,377 $14,436 $15,203 $11,558 $10,327 $(9,059) $(4,950)
Common Share Data
Basic earnings per share $.14 $.37 $.39 $.30 $.28 $(.23) $(.14)
Diluted earnings per share .14 .37 .39 .30 .28 (.23) (.14)
Cash dividends declared per share .14 .14 .14 .14 .14
Book value per share 16.45 16.48 16.23 15.96 15.80 (.03) .65
Tangible book value per share (1) 14.00 14.01 13.94 13.66 13.48 (.01) .52
Market price per share (quarter end) 29.84 28.65 27.12 26.12 26.86 1.19 2.98
Common Shares Outstanding
Common stock 38,992,163 38,991,022 38,967,972 38,870,424 38,845,573 1,141 146,590
Weighted average shares outstanding:
Basic 38,009,181 37,918,753 37,896,125 37,867,718 35,904,009 90,428 2,105,172
Diluted 38,068,619 37,963,141 37,942,483 37,954,585 36,009,098 105,478 2,059,521
Average Balance Sheet Highlights
Loans $3,603,482 $2,893,187 $2,905,415 $2,846,571 $2,431,512 $710,295 $1,171,970
Assets 4,982,451 4,178,731 4,200,843 4,181,961 3,636,544 803,720 1,345,907
Deposits 4,248,553 3,437,329 3,413,831 3,423,506 2,975,510 811,224 1,273,043
Equity 645,409 638,620 627,294 617,009 559,561 6,789 85,848
Tangible equity (1) 549,564 550,002 538,153 527,603 514,982 (438) 34,582


State Bank Financial Corporation
4Q17 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
4Q17 change vs
(Dollars in thousands, except per share amounts) 4Q17 3Q17 2Q17 1Q17 4Q16 3Q17 4Q16
Key Metrics (2)
Return on average assets .43% 1.37% 1.45% 1.12% 1.13% (.94)% (.70)%
Return on average equity 3.31 8.97 9.72 7.60 7.34 (5.66) (4.03)
Yield on earning assets 5.39 4.85 5.11 4.93 4.87 .54 .52
Cost of funds .52 .38 .38 .37 .35 .14 .17
Rate on interest-bearing liabilities .71 .54 .53 .52 .49 .17 .22
Net interest margin 4.91 4.51 4.76 4.59 4.56 .40 .35
Leverage ratio (3) 11.24 13.37 13.23 13.04 14.90 (2.13) (3.66)
Tier I risk-based capital ratio (3) 12.61 12.30 15.01 14.74 14.78 .31 (2.17)
Total risk-based capital ratio (3) 13.27 12.91 15.79 15.49 15.52 .36 (2.25)
Efficiency ratio (4) 59.69 58.45 56.18 64.71 67.01 1.24 (7.32)
Average loans to average deposits 84.82 84.17 85.11 83.15 81.72 .65 3.10
Noninterest-bearing deposits to total deposits 28.07 27.82 29.24 27.71 28.69 .25 (.62)

(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
4Q17 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
4Q17 change vs
(Dollars in thousands) 4Q17 3Q17 2Q17 1Q17 4Q16 3Q17 4Q16
Assets
Cash and amounts due from depository institutions $17,438 $14,235 $11,284 $12,101 $13,219 $3,203 $4,219
Interest-bearing deposits in other financial institutions 211,142 251,115 126,390 62,222 132,851 (39,973) 78,291
Federal funds sold 2,297 16,889 3,523 (14,592) (1,226)
Cash and cash equivalents 230,877 282,239 137,674 74,323 149,593 (51,362) 81,284
Investment securities available-for-sale 873,970 920,763 847,795 896,297 847,178 (46,793) 26,792
Investment securities held-to-maturity 32,852 57,867 63,104 67,053 67,063 (25,015) (34,211)
Loans 3,532,193 3,572,790 2,881,000 2,854,780 2,814,572 (40,597) 717,621
Allowance for loan and lease losses (28,750) (26,842) (27,988) (26,976) (26,598) (1,908) (2,152)
Loans, net 3,503,443 3,545,948 2,853,012 2,827,804 2,787,974 (42,505) 715,469
Loans held-for-sale 36,211 47,743 48,895 51,380 52,169 (11,532) (15,958)
Other real estate owned 895 1,271 2,407 3,759 10,897 (376) (10,002)
Premises and equipment, net 51,794 52,120 51,170 51,535 52,056 (326) (262)
Goodwill 84,564 84,564 77,476 77,084 77,084 7,480
Other intangibles, net 11,034 11,755 11,599 12,054 12,749 (721) (1,715)
SBA servicing rights 4,069 3,950 3,828 3,547 3,477 119 592
Bank-owned life insurance 67,313 66,846 66,320 65,855 65,371 467 1,942
Other assets 61,560 73,417 70,697 71,990 99,654 (11,857) (38,094)
Total assets $4,958,582 $5,148,483 $4,233,977 $4,202,681 $4,225,265 $(189,901) $733,317
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits $1,191,106 $1,179,698 $1,009,509 $944,838 $984,419 $11,408 $206,687
Interest-bearing deposits 3,052,029 3,061,387 2,443,183 2,464,937 2,446,746 (9,358) 605,283
Total deposits 4,243,135 4,241,085 3,452,692 3,409,775 3,431,165 2,050 811,970
Federal funds purchased and securities sold under agreements to repurchase 25,209 25,499 25,256 25,056 27,673 (290) (2,464)
FHLB borrowings 80,000 100,000 47,014 (47,014)
Notes payable 398 398 398 398 398
Other liabilities 48,289 238,911 43,294 47,169 105,382 (190,622) (57,093)
Total liabilities 4,317,031 4,505,893 3,601,640 3,582,398 3,611,632 (188,862) 705,399
Total shareholders’ equity 641,551 642,590 632,337 620,283 613,633 (1,039) 27,918
Total liabilities and shareholders’ equity $4,958,582 $5,148,483 $4,233,977 $4,202,681 $4,225,265 $(189,901) $733,317
Capital Ratios (1)
Average equity to average assets 12.95% 15.28% 14.93% 14.75% 15.39% (2.33)% (2.44)%
Leverage ratio 11.24 13.37 13.23 13.04 14.90 (2.13) (3.66)
CET1 risk-based capital ratio 12.61 12.30 15.01 14.74 14.78 .31 (2.17)
Tier I risk-based capital ratio 12.61 12.30 15.01 14.74 14.78 .31 (2.17)
Total risk-based capital ratio 13.27 12.91 15.79 15.49 15.52 .36 (2.25)

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


State Bank Financial Corporation
4Q17 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
4Q17 change vs
(Dollars in thousands, except per share amounts) 4Q17 3Q17 2Q17 1Q17 4Q16 3Q17 4Q16
Net Interest Income:
Interest income on loans $46,926 $35,400 $34,872 $34,060 $26,696 $11,526 $20,230
Accretion income on loans 10,671 6,520 9,228 7,677 10,271 4,151 400
Interest income on invested funds 6,034 5,782 5,747 5,460 4,810 252 1,224
Interest expense 5,614 3,370 3,369 3,239 2,631 2,244 2,983
Net interest income 58,017 44,332 46,478 43,958 39,146 13,685 18,871
Provision for loan and lease losses (organic & PNCI loans) 2,050 1,300 1,470 1,361 300 750 1,750
Provision for loan and lease losses (purchased credit impaired loans) 798 (885) 375 (359) (23) 1,683 821
Provision for loan and lease losses 2,848 415 1,845 1,002 277 2,433 2,571
Net interest income after provision for loan and lease losses 55,169 43,917 44,633 42,956 38,869 11,252 16,300
Noninterest Income:
Service charges on deposits 1,678 1,575 1,471 1,467 1,319 103 359
Mortgage banking income 2,558 2,793 3,096 2,894 2,511 (235) 47
Payroll and insurance income 1,698 1,487 1,418 1,495 1,528 211 170
SBA income 1,866 1,464 1,983 1,178 1,718 402 148
ATM income 860 826 864 832 735 34 125
Bank-owned life insurance income 467 526 465 484 467 (59)
(Loss) gain on sale of investment securities (1,481) 3 13 12 42 (1,484) (1,523)
Other 2,494 1,008 1,166 1,097 1,591 1,486 903
Total noninterest income 10,140 9,682 10,476 9,459 9,911 458 229
Noninterest Expense:
Salaries and employee benefits 26,418 21,457 21,912 22,057 19,554 4,961 6,864
Occupancy and equipment 3,576 3,187 3,329 3,280 3,069 389 507
Data processing 2,596 2,587 2,382 2,639 2,131 9 465
Legal and professional fees 973 700 898 1,805 1,702 273 (729)
Merger-related expenses 2,588 135 372 2,235 3,507 2,453 (919)
Marketing 693 342 403 664 430 351 263
Federal deposit insurance premiums and other regulatory fees 498 407 398 397 188 91 310
Loan collection costs and OREO activity 358 181 (213) (1,042) (127) 177 485
Amortization of intangibles 721 701 697 696 516 20 205
Other 2,263 1,874 1,819 1,834 1,905 389 358
Total noninterest expense 40,684 31,571 31,997 34,565 32,875 9,113 7,809
Income Before Income Taxes 24,625 22,028 23,112 17,850 15,905 2,597 8,720
Income tax expense 19,248 7,592 7,909 6,292 5,578 11,656 13,670
Net Income $5,377 $14,436 $15,203 $11,558 $10,327 $(9,059) $(4,950)
Net income allocated to participating securities $136 $389 $413 $295 $282 $(253) $(146)
Net income allocated to common shareholders 5,241 14,047 14,790 11,263 10,045 (8,806) (4,804)
Earnings Per Share
Basic $.14 $.37 $.39 $.30 $.28 $(.23) $(.14)
Diluted .14 .37 .39 .30 .28 (.23) (.14)
Weighted Average Shares Outstanding
Basic 38,009,181 37,918,753 37,896,125 37,867,718 35,904,009 90,428 2,105,172
Diluted 38,068,619 37,963,141 37,942,483 37,954,585 36,009,098 105,478 2,059,521



State Bank Financial Corporation
4Q17 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)
Years Ended December 31 Change
(Dollars in thousands, except per share amounts) 2017 2016
Net Interest Income:
Interest income on loans $151,258 $103,024 $48,234
Accretion income on loans 34,096 43,310 (9,214)
Interest income on invested funds 23,023 18,923 4,100
Interest expense 15,592 9,619 5,973
Net interest income 192,785 155,638 37,147
Provision for loan and lease losses (organic & PNCI loans) 6,181 3,596 2,585
Provision for loan and lease losses (purchased credit impaired loans) (71) (3,359) 3,288
Provision for loan and lease losses 6,110 237 5,873
Net interest income after provision for loan and lease losses 186,675 155,401 31,274
Noninterest Income:
Service charges on deposits 6,191 5,440 751
Mortgage banking income 11,341 12,319 (978)
Payroll and insurance income 6,098 5,625 473
SBA income 6,491 6,458 33
ATM income 3,382 3,008 374
Bank-owned life insurance income 1,942 1,930 12
(Loss) gain on sale of investment securities (1,453) 489 (1,942)
Other 5,765 4,032 1,733
Total noninterest income 39,757 39,301 456
Noninterest Expense:
Salaries and employee benefits 91,844 78,775 13,069
Occupancy and equipment 13,372 12,169 1,203
Data processing 10,204 8,514 1,690
Legal and professional fees 4,376 4,695 (319)
Merger-related expenses 5,330 3,961 1,369
Marketing 2,102 2,216 (114)
Federal deposit insurance premiums and other regulatory fees 1,700 1,744 (44)
Loan collection costs and OREO activity (716) (579) (137)
Amortization of intangibles 2,815 2,102 713
Other 7,790 7,330 460
Total noninterest expense 138,817 120,927 17,890
Income Before Income Taxes 87,615 73,775 13,840
Income tax expense 41,041 26,184 14,857
Net Income $46,574 $47,591 $(1,017)
Net income allocated to participating securities $1,222 $1,303 $(81)
Net income allocated to common shareholders 45,352 46,288 (936)
Earnings Per Share
Basic $1.20 $1.29 $(.09)
Diluted 1.19 1.28 (.09)
Weighted Average Shares Outstanding
Basic 37,923,320 35,931,528 1,991,792
Diluted 37,994,657 36,033,643 1,961,014


State Bank Financial Corporation
4Q17 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
4Q17 change vs
(Dollars in thousands) 4Q17 3Q17 2Q17 1Q17 4Q16 3Q17 4Q16
Composition of Loans
Organic loans (1):
Construction, land & land development $412,540 $460,368 $413,557 $418,186 $500,018 $(47,828) $(87,478)
Other commercial real estate 949,594 915,727 960,762 885,570 754,790 33,867 194,804
Total commercial real estate 1,362,134 1,376,095 1,374,319 1,303,756 1,254,808 (13,961) 107,326
Residential real estate 196,225 175,258 167,755 161,460 144,295 20,967 51,930
Owner-occupied real estate 260,273 261,784 244,637 251,703 256,317 (1,511) 3,956
Commercial, financial & agricultural 430,205 363,551 355,629 336,257 327,381 66,654 102,824
Leases 52,396 66,765 73,103 62,603 71,724 (14,369) (19,328)
Consumer 64,610 61,200 60,028 56,776 36,039 3,410 28,571
Total organic loans 2,365,843 2,304,653 2,275,471 2,172,555 2,090,564 61,190 275,279
Purchased non-credit impaired loans(2):
Construction, land & land development 25,908 30,670 31,083 43,787 51,208 (4,762) (25,300)
Other commercial real estate 218,660 234,486 171,914 188,737 209,531 (15,826) 9,129
Total commercial real estate 244,568 265,156 202,997 232,524 260,739 (20,588) (16,171)
Residential real estate 96,529 112,244 117,449 137,699 144,596 (15,715) (48,067)
Owner-occupied real estate 118,294 125,438 114,438 119,871 115,566 (7,144) 2,728
Commercial, financial & agricultural 529,184 558,992 31,654 33,690 36,206 (29,808) 492,978
Consumer 2,161 2,647 3,393 4,281 6,255 (486) (4,094)
Total purchased non-credit impaired loans 990,736 1,064,477 469,931 528,065 563,362 (73,741) 427,374
Purchased credit impaired loans (3):
Construction, land & land development 13,545 16,918 16,857 17,211 16,537 (3,373) (2,992)
Other commercial real estate 86,748 102,934 46,078 60,664 60,742 (16,186) 26,006
Total commercial real estate 100,293 119,852 62,935 77,875 77,279 (19,559) 23,014
Residential real estate 40,332 42,190 45,513 49,728 54,507 (1,858) (14,175)
Owner-occupied real estate 20,803 26,210 23,262 22,099 23,980 (5,407) (3,177)
Commercial, financial & agricultural 14,051 15,139 3,617 4,153 4,533 (1,088) 9,518
Consumer 135 269 271 305 347 (134) (212)
Total purchased credit impaired loans 175,614 203,660 135,598 154,160 160,646 (28,046) 14,968
Total loans $3,532,193 $3,572,790 $2,881,000 $2,854,780 $2,814,572 $(40,597) $717,621
Composition of Deposits
Noninterest-bearing demand deposits $1,191,106 $1,179,698 $1,009,509 $944,838 $984,419 $11,408 $206,687
Interest-bearing transaction accounts 688,150 619,156 591,038 599,858 664,350 68,994 23,800
Savings and money market deposits 1,626,238 1,680,922 1,373,686 1,393,711 1,292,867 (54,684) 333,371
Time deposits 715,133 731,416 419,020 454,889 466,849 (16,283) 248,284
Brokered and wholesale time deposits 22,508 29,893 59,439 16,479 22,680 (7,385) (172)
Total deposits $4,243,135 $4,241,085 $3,452,692 $3,409,775 $3,431,165 $2,050 $811,970

(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 Bank of Commerce.
(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
4Q17 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
4Q17 change vs
(Dollars in thousands) 4Q17 3Q17 2Q17 1Q17 4Q16 3Q17 4Q16
Allowance for loan and lease losses on organic loans
Beginning Balance $22,709 $22,560 $21,885 $21,086 $21,736 $149 $973
Charge-offs (474) (912) (536) (540) (553) 438 79
Recoveries 77 106 113 77 34 (29) 43
Net (charge-offs) recoveries (397) (806) (423) (463) (519) 409 122
Provision for loan and lease losses 1,727 955 1,098 1,262 (131) 772 1,858
Ending Balance $24,039 $22,709 $22,560 $21,885 $21,086 $1,330 $2,953
Allowance for loan and lease losses on purchased non-credit impaired loans
Beginning Balance $900 $667 $491 $439 $150 $233 $750
Charge-offs (273) (152) (197) (48) (143) (121) (130)
Recoveries 45 40 1 1 1 5 44
Net (charge-offs) recoveries (228) (112) (196) (47) (142) (116) (86)
Provision for loan and lease losses 323 345 372 99 431 (22) (108)
Ending Balance $995 $900 $667 $491 $439 $95 $556
Allowance for loan and lease losses on purchased credit impaired loans
Beginning Balance $3,233 $4,761 $4,600 $5,073 $5,291 $(1,528) $(2,058)
Charge-offs (315) (643) (214) (114) (195) 328 (120)
Recoveries
Net (charge-offs) recoveries (315) (643) (214) (114) (195) 328 (120)
Provision for loan and lease losses 798 (885) 375 (359) (23) 1,683 821
Ending Balance $3,716 $3,233 $4,761 $4,600 $5,073 $483 $(1,357)
Nonperforming organic assets
Nonaccrual loans $6,656 $5,483 $1,422 $6,114 $6,234 $1,173 $422
Total nonperforming organic loans 7,222 5,483 1,422 6,114 6,234 1,739 988
Other real estate owned 153 23 232 282 153 (129)
Total nonperforming organic assets $7,375 $5,483 $1,445 $6,346 $6,516 $1,892 $859
Nonperforming purchased non-credit impaired assets
Nonaccrual loans $5,821 $5,614 $5,141 $4,098 $3,381 $207 $2,440
Total nonperforming PNCI loans 5,821 5,614 5,141 4,098 3,381 207 2,440
Other real estate owned
Total nonperforming PNCI assets $5,821 $5,614 $5,141 $4,098 $3,381 $207 $2,440
Ratios for organic assets
Annualized QTD charge-offs (recoveries) on organic loans to average organic loans .07% .14% .08% .09% .10% (.07) % (.03) %
Nonperforming organic loans to organic loans .31 .24 .06 .28 .30 .07 .01
Nonperforming organic assets to organic loans + OREO .31 .24 .06 .29 .31 .07
Past due organic loans to organic loans .20 .12 .09 .08 .06 .08 .14
Allowance for loan and lease losses on organic loans to organic loans 1.02 .99 .99 1.01 1.01 .03 .01
State Bank Financial Corporation
4Q17 Financial Supplement: Table 6 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
4Q17 change vs
(Dollars in thousands) 4Q17 3Q17 2Q17 1Q17 4Q16 3Q17 4Q16
Ratios for purchased non-credit impaired loans
Annualized QTD charge-offs (recoveries) on PNCI loans to average PNCI loans .09% .10% .16% .03% .31% (.01) % (.22) %
Nonperforming PNCI loans to PNCI loans .59 .53 1.09 .78 .60 .06 (.01)
Nonperforming PNCI assets to PNCI loans + OREO .59 .53 1.09 .78 .60 .06 (.01)
Past due PNCI loans to PNCI loans .40 .48 1.05 .90 .68 (.08) (.28)
Allowance for loan and lease losses on PNCI loans to PNCI loans .10 .08 .14 .09 .08 .02 .02
Ratios for purchased credit impaired loans (1)
Annualized QTD charge-offs (recoveries) on PCI loans to average PCI loans .66% 1.95% .60% .30% .63% (1.29) % .03%
Past due PCI loans to PCI loans 5.84 8.12 10.26 10.68 8.92 (2.28) (3.08)
Allowance for loan and lease losses on PCI loans to PCI loans 2.12 1.59 3.51 2.98 3.16 .53 (1.04)

(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
4Q17 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
4Q17 change vs
(Dollars in thousands) 4Q17 3Q17 2Q17 1Q17 4Q16 3Q17 4Q16
Average Balances
Interest-bearing deposits in other financial institutions and federal funds sold $168,223 $108,546 $73,862 $85,720 $82,797 $59,677 $85,426
Investment securities 924,933 913,898 947,300 961,913 911,025 11,035 13,908
Loans, excluding purchased credit impaired (1) 3,413,159 2,762,479 2,762,996 2,692,517 2,307,794 650,680 1,105,365
Purchased credit impaired loans 190,323 130,708 142,419 154,054 123,718 59,615 66,605
Total earning assets 4,696,638 3,915,631 3,926,577 3,894,204 3,425,334 781,007 1,271,304
Total nonearning assets 285,813 263,100 274,266 287,757 211,210 22,713 74,603
Total assets 4,982,451 4,178,731 4,200,843 4,181,961 3,636,544 803,720 1,345,907
Interest-bearing transaction accounts 664,938 580,090 585,343 602,378 575,977 84,848 88,961
Savings & money market deposits 1,685,292 1,383,326 1,380,586 1,388,876 1,118,548 301,966 566,744
Time deposits 724,578 420,192 437,475 456,811 385,146 304,386 339,432
Brokered and wholesale time deposits 25,911 49,675 38,353 19,926 22,885 (23,764) 3,026
Other borrowings 35,353 57,988 119,652 81,344 52,555 (22,635) (17,202)
Total interest-bearing liabilities 3,136,072 2,491,271 2,561,409 2,549,335 2,155,111 644,801 980,961
Noninterest-bearing deposits 1,147,834 1,004,046 972,074 955,515 872,954 143,788 274,880
Other liabilities 53,136 44,794 40,066 60,102 48,918 8,342 4,218
Shareholders’ equity 645,409 638,620 627,294 617,009 559,561 6,789 85,848
Total liabilities and shareholders' equity 4,982,451 4,178,731 4,200,843 4,181,961 3,636,544 803,720 1,345,907
Interest Margins (2)
Interest-bearing deposits in other financial institutions and federal funds sold .86% .80% .50% .44% .31% .06% .55%
Investment securities, tax-equivalent basis 2.43 2.42 2.39 2.26 2.07 .01 .36
Loans, excluding purchased credit impaired, tax-equivalent basis (3) 5.47 5.11 5.08 5.15 4.63 .36 .84
Purchased credit impaired loans 22.24 19.79 25.99 20.21 33.03 2.45 (10.79)
Total earning assets 5.39% 4.85% 5.11% 4.93% 4.87% .54% .52%
Interest-bearing transaction accounts .13 .13 .12 .12 .12 .01
Savings & money market deposits .80 .63 .61 .60 .59 .17 .21
Time deposits 1.04 .72 .69 .72 .72 .32 .32
Brokered and wholesale time deposits 1.15 1.05 1.05 1.06 .85 .10 .30
Other borrowings .52 .76 .82 .65 .45 (.24) .07
Total interest-bearing liabilities .71% .54% .53% .52% .49% .17% .22%
Net interest spread 4.68% 4.31% 4.58% 4.41% 4.38% .37% .30%
Net interest margin 4.91% 4.51% 4.76% 4.59% 4.56% .40% .35%
Net interest margin contribution from accretion income on loans .90% .66% .94% .80% 1.19% .24% (.29)%

(1) Includes average nonaccrual loans of $11.4 million for 4Q17, $8.0 million for 3Q17, $9.3 million for 2Q17, $9.9 million for 1Q17, and $8.4 million for 4Q16.
(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 $128,000 for 4Q17, $177,000 for 3Q17, $131,000 for 2Q17, $140,000 for 1Q17, and $142,000 for 4Q16.


State Bank Financial Corporation
4Q17 Financial Supplement: Table 8
Reconciliation of Non-GAAP Measures (1)
Quarterly (Unaudited)
(dollars in thousands, except per share amounts; taxable equivalent)4Q17 3Q17 2Q17 1Q17 4Q16
Book value per common share reconciliation
Book value per common share (GAAP)$16.45 $16.48 $16.23 $15.96 $15.80
Effect of goodwill and other intangibles(2.45) (2.47) (2.29) (2.30) (2.32)
Tangible book value per common share$14.00 $14.01 $13.94 $13.66 $13.48
Average tangible equity reconciliation
Average equity (GAAP)$645,409 $638,620 $627,294 $617,009 $559,561
Effect of average goodwill and other intangibles(95,845) (88,618) (89,141) (89,406) (44,579)
Average tangible equity$549,564 $550,002 $538,153 $527,603 $514,982

(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.