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State Bank Corp. Reports 114 Percent Increase in Third Quarter Results

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LAKE HAVASU CITY, Ariz., Oct. 29, 2012 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ) ("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income of $263,000, or $0.05 per diluted share, for the quarter ended September 30, 2012, as compared to net income of $123,000, or $0.02 per diluted share, for the same period of 2011. For the nine months ended September 30, 2012, the Company reported net income of $659,000, or $0.12 per diluted share, as compared to a net income of $405,000, or $0.08 per diluted share, for the same period of 2011.

Third Quarter 2012 Highlights include:

  • Net income increased 113.8 percent in the third quarter of 2012 from the same period of 2011.
  • Non-performing assets decreased 30 percent when compared to the same period of 2011.
  • Mortgage department closed 84 loans for a total of $14.03 million, resulting in record quarterly operating profit of $165,000.
  • $5.1 million increase in core deposits 2012.
  • Introduction of an SBA department to further assist small businesses within our communities.

"The recovery plan is working. Our balance sheet is stronger and our credit losses are starting to diminish," commented Brian M. Riley, President & CEO. "We look forward to reporting ongoing improvement to the bottom line in quarters ahead."

The Company provided $100,000 to its loan loss reserve during the third quarter of 2012. Net credit losses during the third quarter of 2012 were $173,000 as compared to $1.47 million for the same period of 2011.

Nonperforming assets were $28.9 million at September 30, 2012, a decrease of $3.7 million from $32.6 million at December 31, 2011. Nonperforming assets represented 9.97 percent of total assets at September 30, 2012 as compared to 11.54 percent at December 31, 2011. The allowance for loan and lease losses totaled $4.02 million, or 2.04 percent of total loans, at September 30, 2012. The Company continues to carefully monitor its level of loss reserves and will proactively make additions as necessary to protect against an uncertain economic environment.

The Company's net interest margin continues to remain strong with third quarter results of 4.05 percent. The main component to this trend continues to be the decline in costs of funds, which decreased for the 23nd consecutive quarter to 0.45 percent for the three months ended September 30, 2012.

As of September 30, 2012, total assets were $290.0 million, an increase of $7.1 million from $282.9 million at December 31, 2011. Total loans were $196.5 million at September 30, 2012 as compared to $199.9 million at December 31, 2011. Total deposits were $248.4 million at September 30, 2012 as compared to $243.4 million at December 31, 2011.

Shareholder equity increased to $28.1 million at September 30, 2012 from $27.5 million at December 31, 2011. This was a result of net operating income. The Bank must meet certain minimum capital requirements to satisfy federal and state laws. The following table provides the Bank's capital ratio at September 30, 2012:

Actual Ratio Ratio to be well capitalized Consent Order Requirement
Leverage Ratio
Tier 1 Capital to Risk-Weighted Assets
Total Capital to Risk-Weighted Assets
9.57%
12.17%
13.43%
5.00%
6.00%
10.00%
9.25%
N/A
12.00%

The Company now complies with all capital requirements of its Consent Order. The Company continues to make progress in reducing its commercial real estate credit concentration and classified assets.

About the Company

State Bank Corp., headquartered in Lake Havasu City, Arizona, is the parent company of Mohave State Bank, the largest locally-owned bank in Mohave County. Mohave State Bank is a full-service bank providing deposit and loan products, and convenient on-line banking to individuals, businesses and professionals. The Bank was established in October 1991, and the holding company was formed in 2004. The Bank has six full-service branches: two in Lake Havasu City, two in Kingman, one in Bullhead City, and one in Yuma, Arizona. The Company is traded over-the-counter as SBAZ. For further information, please visit the web site: www.mohavestbank.com.

The State Bank Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8162

Forward-looking Statements

This press release may include forward-looking statements about State Bank Corp. and its subsidiary, Mohave State Bank, for which the Company claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the Company's possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, borrower capacity to repay, operational factors and competition in the geographic and business areas in which the Company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.

UNAUDITED FINANCIAL STATEMENTS FOLLOW

State Bank Corp.
Five-Quarter Performance Summary
For the Quarter Ended
Dollars in thousands - Unaudited 9/30/2012 6/30/2012 3/31/2012 12/31/2011 9/30/2011
Performance Highlights
Earnings:
Total revenue (Net int. income + nonint. income) $ 2,788 $ 3,099 $ 3,185 $ 3,545 $ 3,190
Net interest income $ 2,621 $ 2,567 $ 2,706 $ 2,980 $ 2,647
Provision for loan losses $ 100 $ 270 $ 100 $ -- $ 500
Noninterest income $ 167 $ 532 $ 479 $ 565 $ 543
Noninterest expense $ 2,425 $ 2,607 $ 2,911 $ 3,408 $ 2,567
Net income (loss) $ 263 $ 222 $ 174 $ 137 $ 123
Per Share Data:
Net income (loss), basic $ 0.05 $ 0.04 $ 0.03 $ 0.02 $ 0.02
Net income (loss), diluted $ 0.05 $ 0.04 $ 0.03 $ 0.02 $ 0.02
Cash dividends declared $ -- $ -- $ -- $ -- $ --
Book value $ 4.95 $ 4.90 $ 4.87 $ 4.83 $ 4.83
Tangible book value $ 4.95 $ 4.90 $ 4.87 $ 4.83 $ 4.83
Performance Ratios:
Return on average assets 0.36% 0.30% 0.24% 0.19% 0.16%
Return on average equity 3.77% 3.19% 2.52% 1.99% 1.79%
Net interest margin, taxable equivalent 4.05% 4.15% 4.49% 4.86% 4.15%
Average cost of funds 0.45% 0.48% 0.53% 0.56% 0.61%
Average yield on loans 5.55% 5.44% 5.64% 6.18% 5.45%
Efficiency ratio 86.98% 84.12% 91.40% 96.14% 80.47%
Non-interest income to total revenue 5.99% 17.17% 15.04% 15.94% 17.02%
Capital & Liquidity:
Total equity to total assets (EOP) 9.72% 9.43% 9.59% 9.72% 9.47%
Tangible equity to tangible assets 9.72% 9.43% 9.59% 9.72% 9.47%
Total loans to total deposits 79.27% 76.27% 77.06% 82.29% 80.25%
Mohave State Bank
Tier 1 leverage ratio 9.57% 9.50% 9.59% 9.39% 9.14%
Tier 1 risk based capital 12.17% 12.01% 11.79% 11.47% 11.54%
Total risk based capital 13.43% 13.27% 13.04% 12.73% 12.59%
Asset Quality:
Gross charge-offs $ 316 $ 350 $ 1,194 $ 307 $ 1,697
Net charge-offs (NCOs) $ 173 $ 298 $ 1,145 $ 259 $ 1,465
NCO to average loans, annualized 0.35% 0.61% 2.30% 0.52% 2.88%
Non-accrual loans $ 10,639 $ 10,919 $ 10,145 $ 14,288 $ 22,527
Other real estate owned $ 18,287 $ 18,197 $ 18,871 $ 18,362 $ 18,832
Repossessed assets $ -- $ -- $ -- $ -- $ --
Non-performing assets (NPAs) $ 28,926 $ 29,116 $ 29,016 $ 32,650 $ 41,359
NPAs to total assets 9.97% 9.84% 10.05% 11.54% 14.26%
Loans >90 days past due $ 147 $ 133 $ -- $ 9 $ 51
NPAs + 90 days past due $ 29,073 $ 29,249 $ 29,016 $ 32,659 $ 41,410
NPAs + loans 90 days past due to total assets 10.03% 9.88% 10.05% 11.55% 14.28%
Allowance for loan losses to total loans 2.04% 2.13% 2.11% 2.58% 2.72%
Allowance for loan losses to NPAs 13.92% 14.08% 14.22% 15.84% 13.12%
Period End Balances:
Assets $ 289,993 $ 296,040 $ 288,787 $ 282,834 $ 289,967
Total Loans (before reserves) $ 196,919 $ 192,734 $ 195,259 $ 200,442 $ 199,278
Deposits $ 248,428 $ 252,713 $ 253,370 $ 243,571 $ 248,316
Stockholders' equity $ 28,184 $ 27,916 $ 27,705 $ 27,484 $ 27,448
Common stock market capitalization $ 14,243 $ 15,668 $ 19,906 $ 11,146 $ 14,821
Full-time equivalent employees 81 76 78 78 81
Shares outstanding 5,697,351 5,697,351 5,687,351 5,686,588 5,678,718
Average Balances:
Assets $ 293,905 $ 292,928 $ 287,138 $ 290,948 $ 298,471
Earning assets $ 258,891 $ 254,386 $ 247,444 $ 251,086 $ 261,946
Total Loans (before reserves) $ 196,513 $ 194,938 $ 199,421 $ 199,978 $ 203,737
Deposits $ 252,687 $ 252,687 $ 246,988 $ 247,934 $ 257,326
Other borrowings $ 12,047 $ 11,728 $ 11,819 $ 14,696 $ 12,833
Stockholders' equity $ 27,925 $ 27,870 $ 27,666 $ 27,570 $ 27,441
Shares outstanding, basic - wtd 5,697,351 5,694,714 5,686,965 5,682,739 5,678,718
Shares outstanding, diluted - wtd 5,697,351 5,694,714 5,687,358 5,683,557 5,679,536
State Bank Corp.
Balance Sheets
Dollars in thousands - Unaudited 9/30/2012 12/31/2011
Consolidated Balance Sheets
Assets
Cash and cash equivalents $ 1,523 $ 2,204
Interest bearing deposits 3,637 3,595
Overnight Funds 28,570 10,560
Held for maturity securities 54 633
Available for sale securities 22,652 29,823
Total cash and securities 56,436 46,815
Loans held for sale, before reserves 2,777 2,409
Gross loans held for investment 196,459 199,986
Loan loss reserve (4,026) (5,172)
Total net loans 195,210 197,223
Premises and equipment, net 10,305 10,508
Other real estate owned 18,287 18,362
Federal Home Loan Bank and other stock 2,091 2,403
Company owned life insurance 5,512 5,388
Other assets 2,152 2,135
Total Assets $ 289,993 $ 282,834
Liabilities
Non interest bearing demand $ 49,890 $ 48,483
Money market, NOW and savings 121,957 118,310
Time deposits <$100K 32,928 35,373
Time deposits >$100K 43,653 41,405
Total Deposits 248,428 243,571
Securities sold under repurchase agreements 11,892 8,523
Federal Home Loan Bank advances -- 2,000
Subordinated debt 675 675
Total Debt 12,567 11,198
Other Liabilities 814 581
Total Liabilities 261,809 255,350
Shareholders' Equity
Common stock 24,576 24,535
Accumulated retained earnings 3,034 2,375
Accumulated other comprehensive income 574 574
Total shareholders equity 28,184 27,484
Total liabilities and shareholders' equity $ 289,993 $ 282,834
State Bank Corp.
Statement of Operations
For the Quarter Ended Year to Date
Dollars in thousands - Unaudited 9/30/2012 9/30/2011 9/30/2012 9/30/2011
Statements of Operations
Interest income
Loans, including fees $ 2,726 $ 2,776 $ 8,187 $ 8,751
Securities 174 256 619 859
Fed funds and other 21 30 51 45
Total interest income 2,921 3,062 8,857 9,655
Interest expense
Deposits 284 388 912 1,248
Borrowings 16 27 52 157
Total interest expense 300 415 964 1,405
Net interest income 2,621 2,647 7,893 8,250
Provision for loan losses 100 500 470 696
Net interest income after loan loss provision 2,521 2,147 7,423 7,554
Noninterest income
Service charges on deposits 108 126 317 365
Mortgage loan fees 118 66 267 248
Gain on sale of loans 298 123 676 377
(511) (510)
Other income 154 228 429 496
Total noninterest income 167 543 1,179 1,486
Noninterest expense
Salaries and employee benefits 1,245 1,148 3,624 3,385
Net occupancy expense 88 90 242 257
Equipment expense 39 45 138 123
Data processing 235 196 712 675
Director fees & expenses 36 36 113 115
Insurance 67 49 202 145
Marketing & promotion 57 72 201 180
Professional fees 132 94 371 280
Office expense 41 46 121 146
Regulatory assessments 167 127 481 561
OREO and repossessed assets 228 546 1,493 2,461
Other expenses 90 118 245 307
Total noninterest expense 2,425 2,567 7,943 8,635
Income (loss) before provision (benefit) for income taxes 263 123 659 405
Provision (benefit) for income taxes -- -- -- --
Net Income (Loss) $ 263 $ 123 $ 659 $ 405
Per Share Data
Basic EPS $ 0.05 $ 0.02 $ 0.12 $ 0.08
Diluted EPS $ 0.05 $ 0.02 $ 0.12 $ 0.08
Average shares outstanding
Basic 5,697,351 5,678,718 5,695,289 4,999,866
Effect of dilutive shares -- 818 130 4,471
Diluted 5,697,351 5,679,536 5,695,419 5,004,337
CONTACT: Brian M. Riley, President & CEO Craig Wenner, EVP/Chief Financial Officer Phone: (928) 855-0000

Source:State Bank Corp.