State Bank Financial Corporation Reports First Quarter 2018 Financial Results

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  • Record net income of $17.4 million, or $.44 per diluted share, in the first quarter of 2018
  • Return on assets of 1.45% and return on equity of 10.96%
  • Loan growth of $104.4 million, or 12.6% annualized, excluding purchased credit impaired loans
  • Successful conversion of AloStar Bank of Commerce's core system
  • Dividend increased 43% to $.20 per common share, a $.06 per share increase

ATLANTA, April 26, 2018 (GLOBE NEWSWIRE) -- State Bank Financial Corporation STBZ today announced unaudited financial results for the first quarter of 2018.  Net income for the first quarter of 2018 was $17.4 million, compared to $5.4 million in the fourth quarter of 2017, which included the impact of a $10.7 million non-cash tax expense related to the revaluation of our net deferred tax assets, and $11.6 million in the first quarter of 2017.  Fully diluted earnings per share were $.44 in the first quarter of 2018, compared to $.14 in the fourth quarter of 2017 and $.30 in the first quarter of 2017.

Tom Wiley, Vice Chairman and CEO, commented, "Strong loan growth, disciplined expense management and completion of the AloStar systems conversion led to a fast start to 2018.  I am proud of our team as we successfully completed the conversion without losing focus on production. We expect the benefits of our merger with AloStar to grow during the year.  Quarterly net income of $17.4 million reflects the benefit of the newly acquired lines of business and the reduction in income taxes."

Operating Highlights

Interest income on loans improved to $48.4 million in the first quarter of 2018, a $1.5 million increase from the fourth quarter of 2017 and a $14.4 million increase from the first quarter of 2017.  Net interest income of $54.9 million in the first quarter of 2018 decreased from $58.0 million in the fourth quarter of 2017 and increased from $44.0 million in the first quarter of 2017.  Accretion income on loans was $5.9 million in the first quarter of 2018, down from $10.7 million in the fourth quarter of 2017 and $7.7 million in the first quarter of 2017. The $4.7 million linked-quarter decrease was primarily due to unexpected acceleration of certain purchased credit impaired loan payoffs in the fourth quarter of 2017.  As of March 31, 2018, approximately $58 million of accretable discount remains to be recognized as loan accretion income.

Noninterest income was $10.5 million in the first quarter of 2018, compared to $10.1 million in the fourth quarter of 2017 and $9.5 million in the first quarter of 2017.  Revenues from mortgage banking and payroll and insurance increased $367,000 and $62,000, respectively, in the first quarter of 2018, compared to the fourth quarter of 2017, while SBA income decreased $674,000.

Total noninterest expense for the first quarter of 2018 was $39.3 million, compared to $40.7 million in the fourth quarter of 2017 and $34.6 million in the first quarter of 2017.  The $1.4 million linked-quarter decrease was primarily due to a $1.3 million decrease in merger-related expenses related to the AloStar Bank of Commerce acquisition.  Merger-related expenses were $1.3 million for the first quarter of 2018.

Financial Condition

Total assets at March 31, 2018, were $4.9 billion, down from $5.0 billion at December 31, 2017.  Total loans were $3.6 billion at March 31, 2018, up $86.3 million from the fourth quarter of 2017.  Period-end organic loans increased to $2.5 billion at March 31, 2018, an increase of $149.5 million from the fourth quarter of 2017.  Purchased non-credit impaired loans decreased to $945.7 million at March 31, 2018, a $45.1 million linked-quarter decline.  Purchased credit impaired loans decreased to $157.5 million at March 31, 2018, an $18.1 million linked-quarter decline.

Past due organic and purchased non-credit impaired loans were .22% and .45% of their respective portfolios at March 31, 2018.  The provision for loan losses on organic and purchased non-credit impaired loans was $2.7 million in the first quarter of 2018 and was primarily attributable to organic loan growth, net charge-offs 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 first quarter of 2018.

Total deposits at March 31, 2018, were $4.2 billion, down $58.7 million from December 31, 2017, as the seasonal cash operating cycle of certain State Bank clients led to a decline of $156.1 million in period-end transaction accounts.  Noninterest-bearing demand deposits represented 26.0% of total deposits as of March 31, 2018.  Average noninterest-bearing demand deposits were $1.1 billion, a $65.3 million decrease from the fourth quarter of 2017 and a $127.0 million increase from the first quarter of 2017.

Joe Evans, Chairman of State Bank Financial, commented, "We began 2018 with a 43% increase in our quarterly dividend and are pleased with the first quarter's solid growth in earnings and loans.  Our focus remains on long term growth, a best in class client experience, operational efficiency and shareholder return.  The economic backdrop in our markets remains favorable and creates great opportunity for continued strong performance in 2018."

Tangible book value per share was $14.15 at the end of the first quarter of 2018.  State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 11.69% and a Tier I risk-based capital ratio of 12.44%.

Detailed Results

Supplemental tables displaying financial results for the first quarter of 2018 and the previous four quarters are included with this press release.

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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 1Q18 Financial Supplement: Table 7, 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:  1.800.772.4206

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 of our website at www.statebt.com.  A slide presentation for today's call is also available in the Investors section of our website.

About State Bank Financial Corporation

State Bank Financial Corporation STBZ, with approximately $4.9 billion in assets as of March 31, 2018, 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," "focus," "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 to be recognized as loan accretion income, expected benefits of our merger with AloStar Bank of Commerce, our focus on long term growth, best in class client experience, operational efficiency and shareholder return, our belief that our markets remain favorable and our prospects for continued strong 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 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
1Q18 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
            1Q18 change vs
(Dollars in thousands, except per share
   amounts)
 1Q18 4Q17 3Q17 2Q17 1Q17 4Q17 1Q17
               
Income Statement Highlights              
Interest income on loans $48,444  $46,926  $35,400  $34,872  $34,060  $1,518  $14,384 
Accretion income on loans 5,946  10,671  6,520  9,228  7,677  (4,725) (1,731)
Interest income on invested funds 6,171  6,034  5,782  5,747  5,460  137  711 
Total interest income 60,561  63,631  47,702  49,847  47,197  (3,070) 13,364 
Interest expense 5,705  5,614  3,370  3,369  3,239  91  2,466 
Net interest income 54,856  58,017  44,332  46,478  43,958  (3,161) 10,898 
Provision for loan and lease losses
(organic & PNCI loans)
 2,650  2,050  1,300  1,470  1,361  600  1,289 
Provision for loan and lease losses
    (purchased credit impaired loans)
 558  798  (885) 375  (359) (240) 917 
Provision for loan and lease losses 3,208  2,848  415  1,845  1,002  360  2,206 
Total noninterest income 10,461  10,140  9,682  10,476  9,459  321  1,002 
Total noninterest expense 39,268  40,684  31,571  31,997  34,565  (1,416) 4,703 
Income before income taxes 22,841  24,625  22,028  23,112  17,850  (1,784) 4,991 
Income tax expense 5,476  19,248  7,592  7,909  6,292  (13,772) (816)
Net income $17,365  $5,377  $14,436  $15,203  $11,558  $11,988  $5,807 
               
Common Share Data              
Basic earnings per share $.45  $.14  $.37  $.39  $.30  $.31  $.15 
Diluted earnings per share .44  .14  .37  .39  .30  .30  .14 
Cash dividends declared per share .20  .14  .14  .14  .14  .06  .06 
Book value per share 16.58  16.45  16.48  16.23  15.96  .13  .62 
Tangible book value per share (1) 14.15  14.00  14.01  13.94  13.66  .15  .49 
Market price per share (quarter end) 30.01  29.84  28.65  27.12  26.12  .17  3.89 
               
Common Shares Outstanding              
Common stock 39,003,412  38,992,163  38,991,022  38,967,972  38,870,424  11,249  132,988 
Weighted average shares outstanding:              
Basic 38,032,007  38,009,181  37,918,753  37,896,125  37,867,718  22,826  164,289 
Diluted 38,070,554  38,068,619  37,963,141  37,942,483  37,954,585  1,935  115,969 
               
Average Balance Sheet Highlights              
Loans $3,598,543  $3,603,482  $2,893,187  $2,905,415  $2,846,571  $(4,939) $751,972 
Assets 4,860,730  4,982,451  4,178,731  4,200,843  4,181,961  (121,721) 678,769 
Deposits 4,084,844  4,248,553  3,437,329  3,413,831  3,423,506  (163,709) 661,338 
Equity 642,787  645,409  638,620  627,294  617,009  (2,622) 25,778 
Tangible equity (1) 547,620  549,564  550,002  538,153  527,603  (1,944) 20,017 
               


 
State Bank Financial Corporation
1Q18 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
            1Q18 change vs
(Dollars in thousands, except per share
   amounts)
 1Q18 4Q17 3Q17 2Q17 1Q17 4Q17 1Q17
               
Key Metrics (2)              
Return on average assets 1.45% .43% 1.37% 1.45% 1.12% 1.02% .33%
Return on average equity 10.96  3.31  8.97  9.72  7.60  7.65  3.36 
Yield on earning assets 5.36  5.39  4.85  5.11  4.93  (.03) .43 
Cost of funds .55  .52  .38  .38  .37  .03  .18 
Rate on interest-bearing liabilities .75  .71  .54  .53  .52  .04  .23 
Net interest margin 4.86  4.91  4.51  4.76  4.59  (.05) .27 
Leverage ratio (3) 11.69  11.24  13.37  13.23  13.04  .45  (1.35)
Tier I risk-based capital ratio (3) 12.44  12.61  12.30  15.01  14.74  (.17) (2.30)
Total risk-based capital ratio (3) 13.14  13.28  12.91  15.79  15.49  (.14) (2.35)
Efficiency ratio (4) 60.12  59.69  58.45  56.18  64.71  .43  (4.59)
Average loans to average deposits 88.09  84.82  84.17  85.11  83.15  3.27  4.94 
Noninterest-bearing deposits to total deposits 26.04  28.07  27.82  29.24  27.71  (2.03) (1.67)
                      

(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)   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
1Q18 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
            1Q18 change vs
(Dollars in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 4Q17 1Q17
               
Assets              
Cash and amounts due from
   depository institutions
 $13,113  $17,438  $14,235  $11,284  $12,101  $(4,325) $1,012 
Interest-bearing deposits in other
   financial institutions
 59,620  211,142  251,115  126,390  62,222  (151,522) (2,602)
Federal funds sold 9,000  2,297  16,889      6,703  9,000 
Cash and cash equivalents 81,733  230,877  282,239  137,674  74,323  (149,144) 7,410 
Equity securities 1,515  1,515  1,515  1,515  1,546    (31)
Debt securities available-for-sale 863,697  872,455  919,248  846,280  894,751  (8,758) (31,054)
Debt securities held-to-maturity 27,558  32,852  57,867  63,104  67,053  (5,294) (39,495)
Loans 3,618,521  3,532,193  3,572,790  2,881,000  2,854,780  86,328  763,741 
Allowance for loan and lease
   losses
 (31,317) (28,750) (26,842) (27,988) (26,976) (2,567) (4,341)
Loans, net 3,587,204  3,503,443  3,545,948  2,853,012  2,827,804  83,761  759,400 
Loans held-for-sale 47,482  36,211  47,743  48,895  51,380  11,271  (3,898)
Other real estate owned 4,207  895  1,271  2,407  3,759  3,312  448 
Premises and equipment, net 52,410  51,794  52,120  51,170  51,535  616  875 
Goodwill 84,564  84,564  84,564  77,476  77,084    7,480 
Other intangibles, net 10,384  11,034  11,755  11,599  12,054  (650) (1,670)
SBA servicing rights 4,003  4,069  3,950  3,828  3,547  (66) 456 
Bank-owned life insurance 67,768  67,313  66,846  66,320  65,855  455  1,913 
Other assets 59,772  61,560  73,417  70,697  71,990  (1,788) (12,218)
Total assets $4,892,297  $4,958,582  $5,148,483  $4,233,977  $4,202,681  $(66,285) $689,616 
Liabilities and Shareholders'
   Equity
              
Noninterest-bearing deposits $1,089,579  $1,191,106  $1,179,698  $1,009,509  $944,838  $(101,527) $144,741 
Interest-bearing deposits 3,094,853  3,052,029  3,061,387  2,443,183  2,464,937  42,824  629,916 
Total deposits 4,184,432  4,243,135  4,241,085  3,452,692  3,409,775  (58,703) 774,657 
Federal funds purchased and
   securities sold under
   agreements to repurchase
 9,565  25,209  25,499  25,256  25,056  (15,644) (15,491)
FHLB borrowings 15,000      80,000  100,000  15,000  (85,000)
Notes payable 398  398  398  398  398     
Other liabilities 36,248  48,289  238,911  43,294  47,169  (12,041) (10,921)
Total liabilities 4,245,643  4,317,031  4,505,893  3,601,640  3,582,398  (71,388) 663,245 
Total shareholders' equity 646,654  641,551  642,590  632,337  620,283  5,103  26,371 
Total liabilities and shareholders' equity $4,892,297  $4,958,582  $5,148,483  $4,233,977  $4,202,681  $(66,285) $689,616 
               
Capital Ratios (1)              
Average equity to average assets 13.22% 12.95% 15.28% 14.93% 14.75% .27% (1.53)%
Leverage ratio 11.69  11.24  13.37  13.23  13.04  .45  (1.35)
CET1 risk-based capital ratio 12.44  12.61  12.30  15.01  14.74  (.17) (2.30)
Tier I risk-based capital ratio 12.44  12.61  12.30  15.01  14.74  (.17) (2.30)
Total risk-based capital ratio 13.14  13.28  12.91  15.79  15.49  (.14) (2.35)

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


 
State Bank Financial Corporation
1Q18 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
            1Q18 change vs
(Dollars in thousands, except per share
   amounts)
 1Q18 4Q17 3Q17 2Q17 1Q17 4Q17 1Q17
               
Net Interest Income:              
Interest income on loans $48,444  $46,926  $35,400  $34,872  $34,060  $1,518  $14,384 
Accretion income on loans 5,946  10,671  6,520  9,228  7,677  (4,725) (1,731)
Interest income on invested funds 6,171  6,034  5,782  5,747  5,460  137  711 
Interest expense 5,705  5,614  3,370  3,369  3,239  91  2,466 
Net interest income 54,856  58,017  44,332  46,478  43,958  (3,161) 10,898 
Provision for loan and lease losses
(organic & PNCI loans)
 2,650  2,050  1,300  1,470  1,361  600  1,289 
Provision for loan and lease losses
   (purchased credit impaired loans)
 558  798  (885) 375  (359) (240) 917 
Provision for loan and lease losses 3,208  2,848  415  1,845  1,002  360  2,206 
Net interest income after
   provision for loan and lease
   losses
 51,648  55,169  43,917  44,633  42,956  (3,521) 8,692 
Noninterest Income:              
Service charges on deposits 1,625  1,678  1,575  1,471  1,467  (53) 158 
Mortgage banking income 2,925  2,558  2,793  3,096  2,894  367  31 
Payroll and insurance income 1,760  1,698  1,487  1,418  1,495  62  265 
SBA income 1,192  1,866  1,464  1,983  1,178  (674) 14 
ATM income 870  860  826  864  832  10  38 
Bank-owned life insurance income 455  467  526  465  484  (12) (29)
(Loss) gain on sale of investment
   securities
   (1,481) 3  13  12  1,481  (12)
Other 1,634  2,494  1,008  1,166  1,097  (860) 537 
Total noninterest income 10,461  10,140  9,682  10,476  9,459  321  1,002 
Noninterest Expense:              
Salaries and employee benefits 26,042  25,089  20,701  21,178  21,388  953  4,654 
Occupancy and equipment 3,496  3,576  3,187  3,329  3,280  (80) 216 
Data processing 2,896  2,596  2,587  2,382  2,639  300  257 
Legal and professional fees 739  973  700  898  1,805  (234) (1,066)
Merger-related expenses 1,264  2,588  135  372  2,235  (1,324) (971)
Marketing 425  693  342  403  664  (268) (239)
Federal deposit insurance premiums
   and other regulatory fees
 500  498  407  398  397  2  103 
Loan collection costs and OREO activity 166  358  181  (213) (1,042) (192) 1,208 
Amortization of intangibles 651  721  701  697  696  (70) (45)
Other 3,089  3,592  2,630  2,553  2,503  (503) 586 
Total noninterest expense 39,268  40,684  31,571  31,997  34,565  (1,416) 4,703 
Income Before Income Taxes 22,841  24,625  22,028  23,112  17,850  (1,784) 4,991 
Income tax expense 5,476  19,248  7,592  7,909  6,292  (13,772) (816)
Net Income $17,365  $5,377  $14,436  $15,203  $11,558  $11,988  $5,807 
               
Net income allocated to
participating securities
 $435  $136  $389  $413  $295  $299  $140 
Net income allocated to common
shareholders
 16,930  5,241  14,047  14,790  11,263  11,689  5,667 
               
Effective Tax Rate 23.97% 78.16% 34.47% 34.22% 35.25% (54.19)% (11.28)%
Earnings Per Share              
Basic $.45  $.14  $.37  $.39  $.30  $.31  $.15 
Diluted .44  .14  .37  .39  .30  .30  .14 
Weighted Average Shares
    Outstanding
              
Basic 38,032,007  38,009,181  37,918,753  37,896,125  37,867,718  22,826  164,289 
Diluted 38,070,554  38,068,619  37,963,141  37,942,483  37,954,585  1,935  115,969 
                      


 
State Bank Financial Corporation
1Q18 Financial Supplement: Table 4
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
            1Q18 change vs
(Dollars in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 4Q17 1Q17
               
Composition of Loans              
Organic loans (1):              
Construction, land & land development $442,942  $412,540  $460,368  $413,557  $418,186  $30,402  $24,756 
Other commercial real estate 941,581  949,594  915,727  960,762  885,570  (8,013) 56,011 
Total commercial real estate 1,384,523  1,362,134  1,376,095  1,374,319  1,303,756  22,389  80,767 
Residential real estate 208,960  196,225  175,258  167,755  161,460  12,735  47,500 
Owner-occupied real estate 253,059  260,273  261,784  244,637  251,703  (7,214) 1,356 
Commercial, financial & agricultural 562,566  430,205  363,551  355,629  336,257  132,361  226,309 
Leases 43,787  52,396  66,765  73,103  62,603  (8,609) (18,816)
Consumer 62,423  64,610  61,200  60,028  56,776  (2,187) 5,647 
Total organic loans 2,515,318  2,365,843  2,304,653  2,275,471  2,172,555  149,475  342,763 
Purchased non-credit impaired loans (2):              
Construction, land & land development 24,352  25,908  30,670  31,083  43,787  (1,556) (19,435)
Other commercial real estate 226,893  218,660  234,486  171,914  188,737  8,233  38,156 
Total commercial real estate 251,245  244,568  265,156  202,997  232,524  6,677  18,721 
Residential real estate 82,416  96,529  112,244  117,449  137,699  (14,113) (55,283)
Owner-occupied real estate 94,900  118,294  125,438  114,438  119,871  (23,394) (24,971)
Commercial, financial & agricultural 515,327  529,184  558,992  31,654  33,690  (13,857) 481,637 
Consumer 1,791  2,161  2,647  3,393  4,281  (370) (2,490)
Total purchased non-credit impaired loans 945,679  990,736  1,064,477  469,931  528,065  (45,057) 417,614 
Purchased credit impaired loans (3):              
Construction, land & land development 12,802  13,545  16,918  16,857  17,211  (743) (4,409)
Other commercial real estate 77,838  86,748  102,934  46,078  60,664  (8,910) 17,174 
Total commercial real estate 90,640  100,293  119,852  62,935  77,875  (9,653) 12,765 
Residential real estate 36,747  40,332  42,190  45,513  49,728  (3,585) (12,981)
Owner-occupied real estate 18,593  20,803  26,210  23,262  22,099  (2,210) (3,506)
Commercial, financial & agricultural 11,436  14,051  15,139  3,617  4,153  (2,615) 7,283 
Consumer 108  135  269  271  305  (27) (197)
Total purchased credit impaired loans 157,524  175,614  203,660  135,598  154,160  (18,090) 3,364 
Total loans $3,618,521  $3,532,193  $3,572,790  $2,881,000  $2,854,780  $86,328  $763,741 
Composition of Deposits              
Noninterest-bearing demand deposits $1,089,579  $1,191,106  $1,179,698  $1,009,509  $944,838  $(101,527) $144,741 
Interest-bearing transaction accounts 633,542  688,150  619,156  591,038  599,858  (54,608) 33,684 
Savings and money market deposits 1,602,908  1,626,238  1,680,922  1,373,686  1,393,711  (23,330) 209,197 
Time deposits 713,869  715,133  731,416  419,020  454,889  (1,264) 258,980 
Brokered and wholesale time deposits 144,534  22,508  29,893  59,439  16,479  122,026  128,055 
Total deposits $4,184,432  $4,243,135  $4,241,085  $3,452,692  $3,409,775  $(58,703) $774,657 
 

(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
1Q18 Financial Supplement: Table 5
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
            1Q18 change vs
(Dollars in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 4Q17 1Q17
               
Allowance for loan and lease losses on
   organic loans
              
Beginning Balance $24,039  $22,709  $22,560  $21,885  $21,086  $1,330  $2,953 
Charge-offs (664) (474) (912) (536) (540) (190) (124)
Recoveries 133  77  106  113  77  56  56 
Net (charge-offs) recoveries (531) (397) (806) (423) (463) (134) (68)
Provision for loan and lease losses 1,374  1,727  955  1,098  1,262  (353) 112 
Ending Balance $24,882  $24,039  $22,709  $22,560  $21,885  $843  $2,997 
               
Allowance for loan and lease losses on
   purchased non-credit impaired loans
              
Beginning Balance $995  $900  $667  $491  $439  $95  $556 
Charge-offs (40) (273) (152) (197) (48) 233  8 
Recoveries 18  45  40  1  1  (27) 17 
Net (charge-offs) recoveries (22) (228) (112) (196) (47) 206  25 
Provision for loan and lease losses 1,276  323  345  372  99  953  1,177 
Ending Balance $2,249  $995  $900  $667  $491  $1,254  $1,758 
               
Allowance for loan and lease losses on
   purchased credit impaired loans
              
Beginning Balance $3,716  $3,233  $4,761  $4,600  $5,073  $483  $(1,357)
Charge-offs (88) (315) (643) (214) (114) 227  26 
Recoveries              
Net (charge-offs) recoveries (88) (315) (643) (214) (114) 227  26 
Provision for loan and lease losses 558  798  (885) 375  (359) (240) 917 
Ending Balance $4,186  $3,716  $3,233  $4,761  $4,600  $470  $(414)
               
Nonperforming organic assets              
Nonaccrual loans $9,186  $6,656  $5,482  $1,422  $6,114  $2,530  $3,072 
Accruing TDRs 556  566        (10) 556 
Total nonperforming organic loans 9,742  7,222  5,482  1,422  6,114  2,520  3,628 
Other real estate owned 3,231  153    23  232  3,078  2,999 
Total nonperforming organic assets $12,973  $7,375  $5,482  $1,445  $6,346  $5,598  $6,627 
               
Nonperforming purchased non-credit
   impaired assets
              
Nonaccrual loans $6,356  $5,821  $5,615  $5,141  $4,098  $535  $2,258 
Accruing TDRs 2,769          2,769  2,769 
Total nonperforming PNCI loans 9,125  5,821  5,615  5,141  4,098  3,304  5,027 
Other real estate owned              
Total nonperforming PNCI assets $9,125  $5,821  $5,615  $5,141  $4,098  $3,304  $5,027 
               
Ratios for organic assets              
Annualized QTD charge-offs
   (recoveries) on organic loans to
   average organic loans
 .09 % .07 % .14 % .08 % .09 % .02 %  %
Nonperforming organic loans to organic
   loans
 .39  .31  .24  .06  .28  .08  .11 
Nonperforming organic assets to organic
   loans + OREO
 .52  .31  .24  .06  .29  .21  .23 
Past due organic loans to organic loans .22  .20  .12  .09  .08  .02  .14 
Allowance for loan and lease losses on
   organic loans to organic loans
 .99  1.02  .99  .99  1.01  (.03) (.02)
                      
               
 
State Bank Financial Corporation
1Q18 Financial Supplement: Table 5 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
            1Q18 change vs
(Dollars in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 4Q17 1Q17
               
Ratios for purchased non-credit
impaired loans
              
Annualized QTD charge-offs
   (recoveries) on PNCI loans to average
   PNCI loans
 .01 % .09 % .10 % .16 % .03 % (.08) % (.02) %
Nonperforming PNCI loans to PNCI
   loans
 .96  .59  .53  1.09  .78  .37  .18 
Nonperforming PNCI assets to PNCI
   loans + OREO
 .96  .59  .53  1.09  .78  .37  .18 
Past due PNCI loans to PNCI loans .45  .40  .48  1.05  .90  .05  (.45)
Allowance for loan and lease losses on
   PNCI loans to PNCI loans
 .24  .10  .08  .14  .09  .14  .15 
               
Ratios for purchased credit impaired
loans (1)
              
Annualized QTD charge-offs (recoveries) on PCI loans to average PCI loans .21 % .66 % 1.95 % .60 % .30 % (.45) % (.09) %
Past due PCI loans to PCI loans 6.47  5.84  8.12  10.26  10.68  .63  (4.21)
Allowance for loan and lease losses on PCI loans to PCI loans 2.66  2.12  1.59  3.51  2.98  .54  (.32)
                      

(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
1Q18 Financial Supplement: Table 6
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
            1Q18 change vs
(Dollars in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 4Q17 1Q17
Average Balances              
Interest-bearing deposits in other
   financial institutions and federal funds
   sold
 $93,692  $168,223  $108,546  $73,862  $85,720  $(74,531) $7,972 
Investment securities 893,685  924,933  913,898  947,300  961,913  (31,248) (68,228)
Loans, excluding purchased credit
   impaired (1)
 3,430,599  3,413,159  2,762,479  2,762,996  2,692,517  17,440  738,082 
Purchased credit impaired loans 167,944  190,323  130,708  142,419  154,054  (22,379) 13,890 
Total earning assets 4,585,920  4,696,638  3,915,631  3,926,577  3,894,204  (110,718) 691,716 
Total nonearning assets 274,810  285,813  263,100  274,266  287,757  (11,003) (12,947)
Total assets 4,860,730  4,982,451  4,178,731  4,200,843  4,181,961  (121,721) 678,769 
Interest-bearing transaction accounts 626,298  664,938  580,090  585,343  602,378  (38,640) 23,920 
Savings & money market deposits 1,594,724  1,685,292  1,383,326  1,380,586  1,388,876  (90,568) 205,848 
Time deposits 715,514  724,578  420,192  437,475  456,811  (9,064) 258,703 
Brokered and wholesale time deposits 65,749  25,911  49,675  38,353  19,926  39,838  45,823 
Other borrowings 85,788  35,353  57,988  119,652  81,344  50,435  4,444 
Total interest-bearing liabilities 3,088,073  3,136,072  2,491,271  2,561,409  2,549,335  (47,999) 538,738 
Noninterest-bearing deposits 1,082,559  1,147,834  1,004,046  972,074  955,515  (65,275) 127,044 
Other liabilities 47,311  53,136  44,794  40,066  60,102  (5,825) (12,791)
Shareholders' equity 642,787  645,409  638,620  627,294  617,009  (2,622) 25,778 
Total liabilities and shareholders'
   equity
 4,860,730  4,982,451  4,178,731  4,200,843  4,181,961  (121,721) 678,769 
               
Interest Margins (2)              
Interest-bearing deposits in other
   financial institutions and federal funds
   sold
 .80% .86% .80% .50% .44% (.06)% .36%
Investment securities, tax-equivalent
   basis
 2.72  2.43  2.42  2.39  2.26  .29  .46 
Loans, excluding purchased credit
   impaired, tax-equivalent basis (3)
 5.73  5.47  5.11  5.08  5.15  .26  .58 
Purchased credit impaired loans 14.36  22.24  19.79  25.99  20.21  (7.88) (5.85)
Total earning assets 5.36% 5.39% 4.85% 5.11% 4.93% (.03)% .43%
Interest-bearing transaction accounts .14  .13  .13  .12  .12  .01  .02 
Savings & money market deposits .76  .80  .63  .61  .60  (.04) .16 
Time deposits 1.09  1.04  .72  .69  .72  .05  .37 
Brokered and wholesale time deposits 1.91  1.15  1.05  1.05  1.06  .76  .85 
Other borrowings 1.31  .52  .75  .82  .65  .79  .66 
Total interest-bearing liabilities .75% .71% .54% .53% .52% .04% .23%
Net interest spread 4.61% 4.68% 4.31% 4.58% 4.41% (.07)% .20%
Net interest margin 4.86% 4.91% 4.51% 4.76% 4.59% (.05)% .27%
Net interest margin contribution
from accretion income on loans
 .53% .90% .66% .94% .80% (.37)% (.27)%
 

(1) Includes average nonaccrual loans of $12.9 million for 1Q18, $11.4 million for 4Q17, $8.0 million for 3Q17, $9.3 million for 2Q17, and $9.9 million for 1Q17.
(2) Interest income or expense annualized for the applicable period.
(3) Reflects taxable equivalent adjustments using the federal statutory tax rate of 21% for all periods beginning on or after January 1, 2018 and 35% for all periods prior to January 1, 2018 in adjusting tax-exempt loan interest income to a fully taxable basis. The taxable equivalent adjustments included above amount to $57,000 for 1Q18, $128,000 for 4Q17, $177,000 for 3Q17, $131,000 for 2Q17, and $140,000 for 1Q17.


 
State Bank Financial Corporation
1Q18 Financial Supplement: Table 7
Reconciliation of Non-GAAP Measures (1)
Quarterly (Unaudited)
 
(dollars in thousands, except per share amounts; taxable
    equivalent
)
1Q18 4Q17 3Q17 2Q17 1Q17
          
Book value per common share reconciliation         
Book value per common share (GAAP)$16.58  $16.45  $16.48  $16.23  $15.96 
Effect of goodwill and other intangibles(2.43) (2.45) (2.47) (2.29) (2.30)
Tangible book value per common share$14.15  $14.00  $14.01  $13.94  $13.66 
          
Average tangible equity reconciliation         
Average equity (GAAP)$642,787  $645,409  $638,620  $627,294  $617,009 
Effect of average goodwill and other intangibles(95,167) (95,845) (88,618) (89,141) (89,406)
Average tangible equity$547,620  $549,564  $550,002  $538,153  $527,603 
          

(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

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