Market Overview

State Bank Financial Corporation Reports Second Quarter 2018 Financial Results

Share:
  • Net income of $18.8 million, or $.48 per diluted share, in the second quarter of 2018
  • Return on assets of 1.52% and return on equity of 11.56%
  • Noninterest-bearing deposit growth of $97.4 million, a 9% linked-quarter increase
  • Announced definitive merger agreement with Cadence Bancorporation in May
  • Merger-related expenses of $2.6 million in the second quarter of 2018

ATLANTA, July 24, 2018 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the second quarter of 2018.  Net income for the second quarter of 2018 was $18.8 million, compared to $17.4 million in the first quarter of 2018, and $15.2 million in the second quarter of 2017. Fully diluted earnings per share were $.48 in the second quarter of 2018, compared to $.44 in the first quarter of 2018 and $.39 in the second quarter of 2017.

Joe Evans, Chairman of State Bank Financial, commented, "Our team is doing a great job of taking care of business while also working diligently to make our announced merger with Cadence Bancorporation a success. I am excited about the $16 billion regional bank we are building that will be a formidable competitor in our markets."

Operating Highlights

Interest income on loans improved to $50.4 million in the second quarter of 2018, a $2.0 million increase from the first quarter of 2018 and a $15.5 million increase from the second quarter of 2017.  Net interest income of $56.1 million in the second quarter of 2018 increased from $54.9 million in the first quarter of 2018 and $46.5 million in the second quarter of 2017.  Accretion income on loans was $6.6 million in the second quarter of 2018, up from $5.9 million in the first quarter of 2018, but down from $9.2 million in the second quarter of 2017.

Noninterest income was $10.9 million in the second quarter of 2018, compared to $10.5 million in the first quarter of 2018 and $10.5 million in the second quarter of 2017.  Revenues from mortgage banking and SBA increased $200,000 and $60,000, respectively, in the second quarter of 2018, compared to the first quarter of 2018. Gain on sale of securities totaled $250,000 in the second quarter of 2018.

Total noninterest expense for the second quarter of 2018 was $40.0 million, compared to $39.3 million in the first quarter of 2018 and $32.0 million in the second quarter of 2017.  The increase was primarily due to $2.6 million in merger-related expenses, a $1.3 million increase compared to the first quarter of 2018. Merger expenses increased as a result of the pending merger with Cadence Bancorporation that was announced during the second quarter of 2018. Salaries and employee benefit expenses decreased $1.8 million compared to the first quarter of 2018.

Financial Condition

Total assets at June 30, 2018, were $5.0 billion, up from $4.9 billion at March 31, 2018.  Total loans were $3.6 billion at June 30, 2018, down $13.2 million from the first quarter of 2018.  Period-end organic loans increased to $2.7 billion at June 30, 2018, an increase of $148.4 million from the first quarter of 2018.  Purchased non-credit impaired loans decreased to $793.1 million at June 30, 2018, a $152.6 million linked-quarter decline.  Purchased credit impaired loans decreased to $148.5 million at June 30, 2018, a $9.1 million linked-quarter decline.

Past due organic and purchased non-credit impaired loans were .16% and .36% of their respective portfolios at June 30, 2018. The provision for loan losses on organic and purchased non-credit impaired loans was $2.6 million in the second quarter of 2018 and was primarily attributable to organic loan growth in the quarter. The organic allowance as a percent of organic loans was .99% at the end of the second quarter of 2018.

Total deposits at June 30, 2018, were $4.3 billion, up $118.3 million from March 31, 2018. Noninterest-bearing demand deposits represented 27.6% of total deposits as of June 30, 2018. Period-end and average noninterest-bearing demand deposits were $1.2 billion and $1.1 billion, respectively, a $97.4 million and $66.4 million increase from the first quarter of 2018.

Tom Wiley, Vice Chairman and CEO, commented, "We experienced solid growth in total deposits in the second quarter, which increased 3% from the first quarter, including 9% growth in noninterest-bearing deposits. We continue to focus on growing low-cost core deposits and delivering an exceptional experience for our clients."

Tangible book value per share was $14.38 at the end of the second quarter of 2018.  State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 11.75% and a Tier I risk-based capital ratio of 12.79%.

Detailed Results

Supplemental tables displaying financial results for the second quarter of 2018, the previous four quarters, and the first half of 2018 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 2Q18 Financial Supplement: Table 8, Reconciliation of Non-GAAP Measures.

About State Bank Financial Corporation

State Bank Financial Corporation (NASDAQ:STBZ), with approximately $5.0 billion in assets as of June 30, 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 our pending merger with Cadence Bancorporation ("Cadence"). 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 occurrence of any event, change or other circumstances that could give rise to the right of Cadence or us to terminate the definitive merger agreement; the outcome of any legal proceedings that may be instituted against Cadence or us; the failure to obtain necessary regulatory approvals for our merger with Cadence (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction), and approval of our shareholders or to satisfy any of the other conditions to the merger on a timely basis or at all; the possibility that the anticipated benefits of the merger are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Cadence and State Bank do business; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the merger; Cadence's ability to complete the acquisition and integration of State Bank successfully; and other factors that may affect ours or Cadence's future results, 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.

Important Additional Information

In connection with the proposed transaction between Cadence and State Bank Financial Corporation, Cadence has filed with the SEC a Registration Statement on Form S-4 (Registration Statement No. 333-225587 (the "Registration Statement") including a joint information statement of Cadence and proxy statement of State Bank Financial Corporation and a prospectus of Cadence, as well as other relevant documents concerning the proposed transaction. The proposed transaction will be submitted to State Bank Financial Corporation's shareholders for their consideration. Cadence Bancorp, LLC, the controlling stockholder of Cadence, has delivered a written consent approving the proposed transaction. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Stockholders of Cadence and shareholders of State Bank Financial Corporation are urged to read the Registration Statement, information statement, proxy statement and prospectus regarding the transaction and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information about the transaction.

Shareholders are able to obtain a free copy of the Registration Statement, information statement, proxy statement and prospectus, as well as other filings containing information State Bank Financial Corporation and Cadence, without charge, at the SEC's website (http://www.sec.gov). Copies of the Registration Statement, information statement, proxy statement and prospectus and the filings with the SEC that are incorporated by reference therein can also be obtained, without charge, by directing a request to State Bank Financial Corporation, 3399 Peachtree Road NE, Suite 1900, Atlanta, Georgia 30326, Attention: Corporate Secretary or Cadence Bancorporation, 2800 Post Oak Boulevard, Suite 3800, Houston, Texas 77056, Attention: Corporate Secretary.

Participants in the Solicitation

State Bank Financial Corporation, Cadence and certain of their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding State Bank Financial Corporation's directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on April 12, 2018, and certain of its Current Reports on Form 8-K. Information regarding Cadence's directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on March 30, 2018, and certain of its Current Reports on Form 8-K. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the Registration Statement, information statement, proxy statement and prospectus and other relevant materials filed with the SEC. Free copies of these documents may be obtained as described in the preceding paragraph.

State Bank Financial Corporation
2Q18 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
                                             
                                            2Q18 change vs  
(Dollars in thousands, except per share amounts)   2Q18     1Q18     4Q17     3Q17     2Q17     1Q18     2Q17  
Income Statement Highlights                                                        
Interest income on loans   $ 50,416     $ 48,444     $ 46,926     $ 35,400     $ 34,872     $ 1,972     $ 15,544  
Accretion income on loans   6,595     5,946     10,671     6,520     9,228     649     (2,633 )
Interest income on invested funds   6,677     6,171     6,034     5,782     5,747     506     930  
Total interest income   63,688     60,561     63,631     47,702     49,847     3,127     13,841  
Interest expense   7,558     5,705     5,614     3,370     3,369     1,853     4,189  
Net interest income   56,130     54,856     58,017     44,332     46,478     1,274     9,652  
Provision for loan and lease losses (organic & PNCI loans)   2,556     2,650     2,050     1,300     1,470     (94 )   1,086  
Provision for loan and lease losses (purchased credit impaired loans)   (163 )   558     798     (885 )   375     (721 )   (538 )
Provision for loan and lease losses   2,393     3,208     2,848     415     1,845     (815 )   548  
Total noninterest income   10,917     10,461     10,140     9,682     10,476     456     441  
Total noninterest expense   39,983     39,268     40,684     31,571     31,997     715     7,986  
Income before income taxes   24,671     22,841     24,625     22,028     23,112     1,830     1,559  
Income tax expense   5,904     5,476     19,248     7,592     7,909     428     (2,005 )
Net income   $ 18,767     $ 17,365     $ 5,377     $ 14,436     $ 15,203     $ 1,402     $ 3,564  
                             
Common Share Data                            
Basic earnings per share   $ .48     $ .45     $ .14     $ .37     $ .39     $ .03     $ .09  
Diluted earnings per share   .48     .44     .14     .37     .39     .04     .09  
Cash dividends declared per share   .20     .20     .14     .14     .14         .06  
Book value per share   16.79     16.58     16.45     16.48     16.23     .21     .56  
Tangible book value per share (1)   14.38     14.15     14.00     14.01     13.94     .23     .44  
Market price per share (quarter end)   33.40     30.01     29.84     28.65     27.12     3.39     6.28  
                             
Common Shares Outstanding                            
Common stock   39,121,749     39,003,412     38,992,163     38,991,022     38,967,972     118,337     153,777  
Weighted average shares outstanding:                            
Basic   38,038,181     38,032,007     38,009,181     37,918,753     37,896,125     6,174     142,056  
Diluted   38,075,106     38,070,554     38,068,619     37,963,141     37,942,483     4,552     132,623  
                             
Average Balance Sheet Highlights                            
Loans   $ 3,662,142     $ 3,598,543     $ 3,603,482     $ 2,893,187     $ 2,905,415     $ 63,599     $ 756,727  
Assets   4,950,453     4,860,730     4,982,451     4,178,731     4,200,843     89,723     749,610  
Deposits   4,200,187     4,084,844     4,248,553     3,437,329     3,413,831     115,343     786,356  
Equity   650,919     642,787     645,409     638,620     627,294     8,132     23,625  
Tangible equity (1)   556,403     547,620     549,564     550,002     538,153     8,783     18,250  
                             


State Bank Financial Corporation
2Q18 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
                        2Q18 change vs
(Dollars in thousands, except per share  amounts)   2Q18   1Q18   4Q17   3Q17   2Q17   1Q18   2Q17
                             
Key Metrics (2)                            
Return on average assets   1.52 %   1.45 %   .43 %   1.37 %   1.45 %   .07 %   .07 %
Return on average equity   11.56     10.96     3.31     8.97     9.72     .60     1.84  
Yield on earning assets   5.47     5.36     5.39     4.85     5.11     .11     .36  
Cost of funds   .71     .55     .52     .38     .38     .16     .33  
Rate on interest-bearing liabilities   .98     .75     .71     .54     .53     .23     .45  
Net interest margin   4.82     4.86     4.91     4.51     4.76     (.04 )   .06  
Leverage ratio (3)   11.75     11.69     11.24     13.37     13.23     .06     (1.48 )
Tier I risk-based capital ratio (3)   12.79     12.44     12.61     12.30     15.01     .35     (2.22 )
Total risk-based capital ratio (3)   13.53     13.14     13.28     12.91     15.79     .39     (2.26 )
Efficiency ratio (4)   59.63     60.12     59.69     58.45     56.18     (.49 )   3.45  
Average loans to average deposits   87.19     88.09     84.82     84.17     85.11     (.90 )   2.08  
Noninterest-bearing deposits to total deposits   27.59     26.04     28.07     27.82     29.24     1.55     (1.65 )
                                           
(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
2Q18 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
                                         
                                  2Q18 change vs
(Dollars in thousands)   2Q18
  1Q18
  4Q17
  3Q17
  2Q17
  1Q18
  2Q17
Assets                                                        
Cash and amounts due from depository institutions   $ 12,974     $ 13,113     $ 17,438     $ 14,235     $ 11,284     $ (139 )   $ 1,690  
Interest-bearing deposits in other financial institutions   215,360     59,620     211,142     251,115     126,390     155,740     88,970  
Federal funds sold   9,957     9,000     2,297     16,889         957     9,957  
Cash and cash equivalents   238,291     81,733     230,877     282,239     137,674     156,558     100,617  
Equity securities   1,515     1,515     1,515     1,515     1,515          
Debt securities available-for-sale   835,670     863,697     872,455     919,248     846,280     (28,027 )   (10,610 )
Debt securities held-to-maturity   16,742     27,558     32,852     57,867     63,104     (10,816 )   (46,362 )
Loans   3,605,273     3,618,521     3,532,193     3,572,790     2,881,000     (13,248 )   724,273  
Allowance for loan and lease losses   (33,335 )   (31,317 )   (28,750 )   (26,842 )   (27,988 )   (2,018 )   (5,347 )
Loans, net   3,571,938     3,587,204     3,503,443     3,545,948     2,853,012     (15,266 )   718,926  
Loans held-for-sale   55,096     47,482     36,211     47,743     48,895     7,614     6,201  
Other real estate owned   5,012     4,207     895     1,271     2,407     805     2,605  
Premises and equipment, net   56,965     52,410     51,794     52,120     51,170     4,555     5,795  
Goodwill   84,564     84,564     84,564     84,564     77,476         7,088  
Other intangibles, net   9,729     10,384     11,034     11,755     11,599     (655 )   (1,870 )
SBA servicing rights   3,989     4,003     4,069     3,950     3,828     (14 )   161  
Bank-owned life insurance   68,231     67,768     67,313     66,846     66,320     463     1,911  
Other assets   64,587     59,772     61,560     73,417     70,697     4,815     (6,110 )
Total assets   $ 5,012,329     $ 4,892,297     $ 4,958,582     $ 5,148,483     $ 4,233,977     $ 120,032     $ 778,352  
Liabilities and Shareholders' Equity                            
Noninterest-bearing deposits   $ 1,187,028     $ 1,089,579     $ 1,191,106     $ 1,179,698     $ 1,009,509     $ 97,449     $ 177,519  
Interest-bearing deposits   3,115,676     3,094,853     3,052,029     3,061,387     2,443,183     20,823     672,493  
Total deposits   4,302,704     4,184,432     4,243,135     4,241,085     3,452,692     118,272     850,012  
Federal funds purchased and securities sold under agreements to repurchase   13,525     9,565     25,209     25,499     25,256     3,960     (11,731 )
FHLB borrowings       15,000             80,000     (15,000 )   (80,000 )
Notes payable   398     398     398     398     398          
Other liabilities   38,783     36,248     48,289     238,911     43,294     2,535     (4,511 )
Total liabilities   4,355,410     4,245,643     4,317,031     4,505,893     3,601,640     109,767     753,770  
Total shareholders' equity   656,919     646,654     641,551     642,590     632,337     10,265     24,582  
Total liabilities and shareholders' equity   $ 5,012,329     $ 4,892,297     $ 4,958,582     $ 5,148,483     $ 4,233,977     $ 120,032     $ 778,352  
                             
Capital Ratios (1)                            
Average equity to average assets   13.15 %   13.22 %   12.95 %   15.28 %   14.93 %   (.07 )%   (1.78 )%
Leverage ratio   11.75     11.69     11.24     13.37     13.23     .06     (1.48 )
CET1 risk-based capital ratio   12.79     12.44     12.61     12.30     15.01     .35     (2.22 )
Tier I risk-based capital ratio   12.79     12.44     12.61     12.30     15.01     .35     (2.22 )
Total risk-based capital ratio   13.53     13.14     13.28     12.91     15.79     .39     (2.26 )
                                           
(1)       Current period capital ratios are estimated as of the date of this earning release.
     


State Bank Financial Corporation
2Q18 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
                                                       
                                            2Q18 change vs
(Dollars in thousands, except per share amounts)   2Q18   1Q18   4Q17   3Q17   2Q17   1Q18   2Q17
Net Interest Income:                                                        
Interest income on loans   $ 50,416     $ 48,444     $ 46,926     $ 35,400     $ 34,872     $ 1,972     $ 15,544  
Accretion income on loans   6,595     5,946     10,671     6,520     9,228     649     (2,633 )
Interest income on invested funds   6,677     6,171     6,034     5,782     5,747     506     930  
Interest expense   7,558     5,705     5,614     3,370     3,369     1,853     4,189  
Net interest income   56,130     54,856     58,017     44,332     46,478     1,274     9,652  
Provision for loan and lease losses (organic & PNCI loans)   2,556     2,650     2,050     1,300     1,470     (94 )   1,086  
Provision for loan and lease losses (purchased credit impaired loans)   (163 )   558     798     (885 )   375     (721 )   (538 )
Provision for loan and lease losses   2,393     3,208     2,848     415     1,845     (815 )   548  
Net interest income after provision for loan and lease losses   53,737     51,648     55,169     43,917     44,633     2,089     9,104  
Noninterest Income:                            
Service charges on deposits   1,462     1,625     1,678     1,575     1,471     (163 )   (9 )
Mortgage banking income   3,125     2,925     2,558     2,793     3,096     200     29  
Payroll and insurance income   1,608     1,760     1,698     1,487     1,418     (152 )   190  
SBA income   1,252     1,192     1,866     1,464     1,983     60     (731 )
ATM income   919     870     860     826     864     49     55  
Bank-owned life insurance income   463     455     467     526     465     8     (2 )
Gain (loss) on sale of investment securities   250         (1,481 )   3     13     250     237  
Other   1,838     1,634     2,494     1,008     1,166     204     672  
Total noninterest income   10,917     10,461     10,140     9,682     10,476     456     441  
Noninterest Expense:                            
Salaries and employee benefits   24,279     26,042     25,089     20,701     21,178     (1,763 )   3,101  
Occupancy and equipment   3,421     3,496     3,576     3,187     3,329     (75 )   92  
Data processing   2,696     2,896     2,596     2,587     2,382     (200 )   314  
Legal and professional fees   967     739     973     700     898     228     69  
Merger-related expenses   2,601     1,264     2,588     135     372     1,337     2,229  
Marketing   940     425     693     342     403     515     537  
Federal deposit insurance premiums and other regulatory fees   589     500     498     407     398     89     191  
Loan collection costs and OREO activity   (116 )   166     358     181     (213 )   (282 )   97  
Amortization of intangibles   654     651     721     701     697     3     (43 )
Other   3,952     3,089     3,592     2,630     2,553     863     1,399  
Total noninterest expense   39,983     39,268     40,684     31,571     31,997     715     7,986  
Income Before Income Taxes   24,671     22,841     24,625     22,028     23,112     1,830     1,559  
Income tax expense   5,904     5,476     19,248     7,592     7,909     428     (2,005 )
Net Income   $ 18,767     $ 17,365     $ 5,377     $ 14,436     $ 15,203     $ 1,402     $ 3,564  
                             
Net income allocated to participating securities   $ 509     $ 435     $ 136     $ 389     $ 413     $ 74     $ 96  
Net income allocated to common shareholders   18,258     16,930     5,241     14,047     14,790     1,328     3,468  
                             
Effective Tax Rate   23.93 %   23.97 %   78.16 %   34.47 %   34.22 %   (.04 )%   (10.29 )%
Earnings Per Share                            
Basic   $ .48     $ .45     $ .14     $ .37     $ .39     $ .03     $ .09  
Diluted   .48     .44     .14     .37     .39     .04     .09  
Weighted Average Shares Outstanding                            
Basic   38,038,181     38,032,007     38,009,181     37,918,753     37,896,125     6,174     142,056  
Diluted   38,075,106     38,070,554     38,068,619     37,963,141     37,942,483     4,552     132,623  
                                           


State Bank Financial Corporation
2Q18 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)
    Six Months Ended June 30    
    2018   2017   Change
Net Interest Income:            
Interest income on loans   $ 98,860     $ 68,932     $ 29,928  
Accretion income on loans   12,541     16,905     (4,364 )
Interest income on invested funds   12,848     11,207     1,641  
Interest expense   13,263     6,608     6,655  
Net interest income   110,986     90,436     20,550  
Provision for loan and lease losses (organic & PNCI loans)   5,206     2,831     2,375  
Provision for loan and lease losses (purchased credit impaired loans)   395     16     379  
Provision for loan and lease losses   5,601     2,847     2,754  
Net interest income after provision for loan and lease losses   105,385     87,589     17,796  
Noninterest Income:            
Service charges on deposits   3,087     2,938     149  
Mortgage banking income   6,050     5,990     60  
Payroll and insurance income   3,368     2,913     455  
SBA income   2,444     3,161     (717 )
ATM income   1,789     1,696     93  
Bank-owned life insurance income   918     949     (31 )
Gain on sale of investment securities   250     25     225  
Other   3,472     2,263     1,209  
Total noninterest income   21,378     19,935     1,443  
Noninterest Expense:            
Salaries and employee benefits   50,321     42,566     7,755  
Occupancy and equipment   6,917     6,609     308  
Data processing   5,592     5,021     571  
Legal and professional fees   1,706     2,703     (997 )
Merger-related expenses   3,865     2,607     1,258  
Marketing   1,365     1,067     298  
Federal deposit insurance premiums and other regulatory fees   1,089     795     294  
Loan collection costs and OREO activity   50     (1,255 )   1,305  
Amortization of intangibles   1,305     1,393     (88 )
Other   7,041     5,056     1,985  
Total noninterest expense   79,251     66,562     12,689  
Income Before Income Taxes   47,512     40,962     6,550  
Income tax expense   11,380     14,201     (2,821 )
Net Income   $ 36,132     $ 26,761     $ 9,371  
             
Net income allocated to participating securities   $ 949     $ 706     $ 243  
Net income allocated to common shareholders   35,183     26,055     9,128  
             
Earnings Per Share            
Basic   $ .93     $ .69     $ .24  
Diluted   .92     .69     .23  
Weighted Average Shares Outstanding            
Basic   38,035,111     37,881,999     153,112  
Diluted   38,072,919     37,934,187     138,732  
                   


State Bank Financial Corporation
2Q18 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
                       
                        2Q18 change vs
(Dollars in thousands)   2Q18   1Q18   4Q17   3Q17   2Q17   1Q18   2Q17
                                                         
Composition of Loans                                                        
Organic loans (1):                                                        
Construction, land & land development   $ 454,625     $ 442,942     $ 412,540     $ 460,368     $ 413,557     $ 11,683     $ 41,068  
Other commercial real estate   947,704     941,581     949,594     915,727     960,762     6,123     (13,058 )
Total commercial real estate   1,402,329     1,384,523     1,362,134     1,376,095     1,374,319     17,806     28,010  
Residential real estate   222,886     208,960     196,225     175,258     167,755     13,926     55,131  
Owner-occupied real estate   270,053     253,059     260,273     261,784     244,637     16,994     25,416  
Commercial, financial & agricultural   666,572     562,566     430,205     363,551     355,629     104,006     310,943  
Leases   36,863     43,787     52,396     66,765     73,103     (6,924 )   (36,240 )
Consumer   65,019     62,423     64,610     61,200     60,028     2,596     4,991  
Total organic loans   2,663,722     2,515,318     2,365,843     2,304,653     2,275,471     148,404     388,251  
Purchased non-credit impaired loans(2):                            
Construction, land & land development   14,282     24,352     25,908     30,670     31,083     (10,070 )   (16,801 )
Other commercial real estate   194,995     226,893     218,660     234,486     171,914     (31,898 )   23,081  
Total commercial real estate   209,277     251,245     244,568     265,156     202,997     (41,968 )   6,280  
Residential real estate   72,817     82,416     96,529     112,244     117,449     (9,599 )   (44,632 )
Owner-occupied real estate   82,500     94,900     118,294     125,438     114,438     (12,400 )   (31,938 )
Commercial, financial & agricultural   426,992     515,327     529,184     558,992     31,654     (88,335 )   395,338  
Consumer   1,503     1,791     2,161     2,647     3,393     (288 )   (1,890 )
Total purchased non-credit impaired loans   793,089     945,679     990,736     1,064,477     469,931     (152,590 )   323,158  
Purchased credit impaired loans (3):                            
Construction, land & land development   13,227     12,802     13,545     16,918     16,857     425     (3,630 )
Other commercial real estate   73,607     77,838     86,748     102,934     46,078     (4,231 )   27,529  
Total commercial real estate   86,834     90,640     100,293     119,852     62,935     (3,806 )   23,899  
Residential real estate   32,087     36,747     40,332     42,190     45,513     (4,660 )   (13,426 )
Owner-occupied real estate   18,019     18,593     20,803     26,210     23,262     (574 )   (5,243 )
Commercial, financial & agricultural   11,440     11,436     14,051     15,139     3,617     4     7,823  
Consumer   82     108     135     269     271     (26 )   (189 )
Total purchased credit impaired loans   148,462     157,524     175,614     203,660     135,598     (9,062 )   12,864  
Total loans   $ 3,605,273     $ 3,618,521     $ 3,532,193     $ 3,572,790     $ 2,881,000     $ (13,248 )   $ 724,273  
Composition of Deposits                            
Noninterest-bearing demand deposits   $ 1,187,028     $ 1,089,579     $ 1,191,106     $ 1,179,698     $ 1,009,509     $ 97,449     $ 177,519  
Interest-bearing transaction accounts   674,205     633,542     688,150     619,156     591,038     40,663     83,167  
Savings and money market deposits   1,587,204     1,602,908     1,626,238     1,680,922     1,373,686     (15,704 )   213,518  
Time deposits   698,361     713,869     715,133     731,416     419,020     (15,508 )   279,341  
Brokered and wholesale time deposits   155,906     144,534     22,508     29,893     59,439     11,372     96,467  
Total deposits   $ 4,302,704     $ 4,184,432     $ 4,243,135     $ 4,241,085     $ 3,452,692     $ 118,272     $ 850,012  
                                                         
(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
2Q18 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
                       
                        2Q18 change vs
(Dollars in thousands)   2Q18   1Q18   4Q17   3Q17   2Q17   1Q18   2Q17
Allowance for loan and lease losses on organic loans                                                        
Beginning Balance   $ 24,882     $ 24,039     $ 22,709     $ 22,560     $ 21,885     $ 843     $ 2,997  
Charge-offs   (171 )   (664 )   (474 )   (912 )   (536 )   493     365  
Recoveries   70     133     77     106     113     (63 )   (43 )
Net (charge-offs) recoveries   (101 )   (531 )   (397 )   (806 )   (423 )   430     322  
Provision for loan and lease losses   1,585     1,374     1,727     955     1,098     211     487  
Ending Balance   $ 26,366     $ 24,882     $ 24,039     $ 22,709     $ 22,560     $ 1,484     $ 3,806  
                             
Allowance for loan and lease losses on purchased non-credit impaired loans                            
Beginning Balance   $ 2,249     $ 995     $ 900     $ 667     $ 491     $ 1,254     $ 1,758  
Charge-offs   (285 )   (40 )   (273 )   (152 )   (197 )   (245 )   (88 )
Recoveries   46     18     45     40     1     28     45  
Net (charge-offs) recoveries   (239 )   (22 )   (228 )   (112 )   (196 )   (217 )   (43 )
Provision for loan and lease losses   971     1,276     323     345     372     (305 )   599  
Ending Balance   $ 2,981     $ 2,249     $ 995     $ 900     $ 667     $ 732     $ 2,314  
                             
Allowance for loan and lease losses on purchased credit impaired loans                            
Beginning Balance   $ 4,186     $ 3,716     $ 3,233     $ 4,761     $ 4,600     $ 470     $ (414 )
Charge-offs   (35 )   (88 )   (315 )   (643 )   (214 )   53     179  
Recoveries                            
Net (charge-offs) recoveries   (35 )   (88 )   (315 )   (643 )   (214 )   53     179  
Provision for loan and lease losses   (163 )   558     798     (885 )   375     (721 )   (538 )
Ending Balance   $ 3,988     $ 4,186     $ 3,716     $ 3,233     $ 4,761     $ (198 )   $ (773 )
                             
Nonperforming organic assets                            
Nonaccrual loans   $ 8,119     $ 9,186     $ 6,656     $ 5,482     $ 1,422     $ (1,067 )   $ 6,697  
Accruing TDRs   490     556     566             (66 )   490  
Total nonperforming organic loans   8,609     9,742     7,222     5,482     1,422     (1,133 )   7,187  
Other real estate owned   4,135     3,231     153         23     904     4,112  
Total nonperforming organic assets   $ 12,744     $ 12,973     $ 7,375     $ 5,482     $ 1,445     $ (229 )   $ 11,299  
                             
Nonperforming purchased non-credit impaired assets                            
Nonaccrual loans   $ 22,585     $ 6,356     $ 5,821     $ 5,615     $ 5,141     $ 16,229     $ 17,444  
Accruing TDRs   2,760     2,769                 (9 )   2,760  
Total nonperforming PNCI loans   25,345     9,125     5,821     5,615     5,141     16,220     20,204  
Other real estate owned                            
Total nonperforming PNCI assets   $ 25,345     $ 9,125     $ 5,821     $ 5,615     $ 5,141     $ 16,220     $ 20,204  
                             
Ratios for organic assets                            
Annualized QTD charge-offs (recoveries) on organic loans to average organic loans   .02 %   .09 %   .07 %   .14 %   .08 %   (.07 ) %   (.06 ) %
Nonperforming organic loans to organic loans   .32     .39     .31     .24     .06     (.07 )   .26  
Nonperforming organic assets to organic loans + OREO   .48     .52     .31     .24     .06     (.04 )   .42  
Past due organic loans to organic loans   .16     .22     .20     .12     .09     (.06 )   .07  
Allowance for loan and lease losses on organic loans to organic loans   .99     .99     1.02     .99     .99          
                             


State Bank Financial Corporation
2Q18 Financial Supplement: Table 6 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
                       
                        2Q18 change vs
(Dollars in thousands)   2Q18   1Q18   4Q17   3Q17   2Q17   1Q18   2Q17
Ratios for purchased non-credit impaired loans                                          
Annualized QTD charge-offs (recoveries) on PNCI loans to average PNCI loans   .11 %   .01 %   .09 %   .10 %   .16 %   .10 %   (.05 )%
Nonperforming PNCI loans to PNCI loans   3.20     .96     .59     .53     1.09     2.24     2.11  
Nonperforming PNCI assets to PNCI loans + OREO   3.20     .96     .59     .53     1.09     2.24     2.11  
Past due PNCI loans to PNCI loans   .36     .45     .40     .48     1.05     (.09 )   (.69 )
Allowance for loan and lease losses on PNCI loans to PNCI loans   .38     .24     .10     .08     .14     .14     .24  
                             
Ratios for purchased credit impaired loans (1)                            
Annualized QTD charge-offs (recoveries) on PCI loans to average PCI loans   .09 %   .21 %   .66 %   1.95 %   .60 %   (.12 )%   (.51 )%
Past due PCI loans to PCI loans   5.95     6.47     5.84     8.12     10.26     (.52 )   (4.31 )
Allowance for loan and lease losses on PCI loans to PCI loans   2.69     2.66     2.12     1.59     3.51     .03     (.82 )
                                           
(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
2Q18 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
                       
                        2Q18 change vs
(Dollars in thousands)   2Q18   1Q18   4Q17   3Q17   2Q17   1Q18   2Q17
Average Balances                                                        
Interest-bearing deposits in other financial institutions and federal funds sold   $ 131,506     $ 93,692     $ 168,223     $ 108,546     $ 73,862     $ 37,814     $ 57,644  
Investment securities   880,667     893,685     924,933     913,898     947,300     (13,018 )   (66,633 )
Loans, excluding purchased credit  impaired (1)   3,507,613     3,430,599     3,413,159     2,762,479     2,762,996     77,014     744,617  
Purchased credit impaired loans   154,529     167,944     190,323     130,708     142,419     (13,415 )   12,110  
Total earning assets   4,674,315     4,585,920     4,696,638     3,915,631     3,926,577     88,395     747,738  
Total nonearning assets   276,138     274,810     285,813     263,100     274,266     1,328     1,872  
Total assets   4,950,453     4,860,730     4,982,451     4,178,731     4,200,843     89,723     749,610  
Interest-bearing transaction accounts   627,800     626,298     664,938     580,090     585,343     1,502     42,457  
Savings & money market deposits   1,568,638     1,594,724     1,685,292     1,383,326     1,380,586     (26,086 )   188,052  
Time deposits   704,850     715,514     724,578     420,192     437,475     (10,664 )   267,375  
Brokered and wholesale time deposits   149,956     65,749     25,911     49,675     38,353     84,207     111,603  
Other borrowings   55,344     85,788     35,353     57,988     119,652     (30,444 )   (64,308 )
Total interest-bearing liabilities   3,106,588     3,088,073     3,136,072     2,491,271     2,561,409     18,515     545,179  
Noninterest-bearing deposits   1,148,943     1,082,559     1,147,834     1,004,046     972,074     66,384     176,869  
Other liabilities   44,003     47,311     53,136     44,794     40,066     (3,308 )   3,937  
Shareholders' equity   650,919     642,787     645,409     638,620     627,294     8,132     23,625  
Total liabilities and shareholders' equity   4,950,453     4,860,730     4,982,451     4,178,731     4,200,843     89,723     749,610  
                             
Interest Margins (2)                            
Interest-bearing deposits in other financial institutions and federal funds sold   1.23 %   .80 %   .86 %   .80 %   .50 %   .43 %   .73 %
Investment securities, tax-equivalent basis   2.86     2.72     2.43     2.42     2.39     .14     .47  
Loans, excluding purchased credit impaired, tax-equivalent basis (3)   5.77     5.73     5.47     5.11     5.08     .04     .69  
Purchased credit impaired loans   17.12     14.36     22.24     19.79     25.99     2.76     (8.87 )
Total earning assets   5.47 %   5.36 %   5.39 %   4.85 %   5.11 %   .11 %   .36 %
Interest-bearing transaction accounts   .16     .14     .13     .13     .12     .02     .04  
Savings & money market deposits   1.07     .76     .80     .63     .61     .31     .46  
Time deposits   1.25     1.09     1.04     .72     .69     .16     .56  
Brokered and wholesale time deposits   1.87     1.91     1.15     1.05     1.05     (.04 )   .82  
Other borrowings   1.59     1.31     .52     .75     .82     .28     .77  
Total interest-bearing liabilities   .98 %   .75 %   .71 %   .54 %   .53 %   .23 %   .45 %
Net interest spread   4.49 %   4.61 %   4.68 %   4.31 %   4.58 %   (.12 )%   (.09 )%
Net interest margin   4.82 %   4.86 %   4.91 %   4.51 %   4.76 %   (.04 )%   .06 %
Net interest margin contribution from accretion income on loans   .57 %   .53 %   .90 %   .66 %   .94 %   .04 %   (.37 )%
                                           
(1)   Includes average nonaccrual loans of $18.9 million for 2Q18, $12.9 million for 1Q18, $11.4 million for 4Q17, $8.0 million for 3Q17, and $9.3 million for 2Q17.
(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 $6,000 for 2Q18, $57,000 for 1Q18, $128,000 for 4Q17, $177,000 for 3Q17, and $131,000 for 2Q17.
     


State Bank Financial Corporation
2Q18 Financial Supplement: Table 8
Reconciliation of Non-GAAP Measures (1)
Quarterly (Unaudited)
                 
                   
(dollars in thousands, except per share amounts; taxable equivalent) 2Q18   1Q18   4Q17   3Q17   2Q17
Book value per common share reconciliation                  
Book value per common share (GAAP) $ 16.79     $ 16.58     $ 16.45     $ 16.48     $ 16.23  
Effect of goodwill and other intangibles (2.41 )   (2.43 )   (2.45 )   (2.47 )   (2.29 )
Tangible book value per common share $ 14.38     $ 14.15     $ 14.00     $ 14.01     $ 13.94  
                   
Average tangible equity reconciliation                  
Average equity (GAAP) $ 650,919     $ 642,787     $ 645,409     $ 638,620     $ 627,294  
Effect of average goodwill and other intangibles (94,516 )   (95,167 )   (95,845 )   (88,618 )   (89,141 )
Average tangible equity $ 556,403     $ 547,620     $ 549,564     $ 550,002     $ 538,153  
                   
(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

Primary Logo

View Comments and Join the Discussion!