State Bank Corp. Earns $1.35 Million in Fourth Quarter 2019 and $7.82 Million for the Year

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LAKE HAVASU CITY, Ariz., Jan. 27, 2020 (GLOBE NEWSWIRE) -- State Bank Corp. SBAZ ("Company"), the holding company for State Bank of Arizona ("Bank"), today reported that net income decreased by 40.8% to $1.35 million, or $0.17 per diluted share, for the fourth quarter ended December 31, 2019, as compared to $2.28 million, or $.28 per diluted share, for the fourth quarter of 2018. In the preceding quarter, the Company reported earnings of $2.39 million, or $0.29 per diluted share. The decrease was primarily due to $873,000 in costs associated with the pending acquisition of the Bank by Glacier Bancorp incurred in the fourth quarter of 2019. There were no acquisition costs during the preceding quarter or the fourth quarter a year ago.

For the year ended December 31, 2019, net income decreased by 8.9% to $7.82 million, or $0.96 per diluted share, compared to $8.58 million, or $1.06 per diluted share, for 2018. 

On September 30, 2019, the Company entered into an agreement to merge with the Glacier Bancorp family of banks. State Bank of Arizona, and its affiliated bank divisions, are expected to be under the Glacier Bancorp umbrella on or around February 29, 2020. The acquisition will see State Bank of Arizona merge into Glacier's current Arizona bank franchise, Foothills Bank.

"We finished the year with solid net interest income generation, and steady loan and deposit growth," stated Brian M. Riley, President and Chief Executive Officer. "We look forward to the opportunity for our customers to join Glacier, which has a strong tradition of providing excellent bank resources and quality customer service in both commercial and regional areas throughout the state of Arizona." 

Fourth Quarter 2019 Financial Highlights:

  • Fourth quarter net income of $1.35 million, or $0.17 per diluted share, which included $837,000 of acquisition related expenses.

  • Loans held for investment grew $33.2 million during the quarter, compared to three months earlier.

  • Return on average assets was 0.80%.

  • Return on average equity was 7.37%.

  • Nonperforming assets were 0.31% of total assets.

  • Tangible book value increased 16.5% to $8.27 per share from $7.10 per share a year earlier.

Net interest margin was 3.82% in the fourth quarter 2019, compared to 3.78% in the preceding quarter, and 3.90% in the fourth quarter a year ago. Average cost of funds decreased to 49 basis points, as the Company lowered its overall deposit rates.

The provision for loan losses was $315,000 during the fourth quarter of 2019, with net charge-offs of $58,000. The allowance for loan losses totaled $4.8 million at December 31, 2019, or 1.09% of total loans. Excluding acquired loans, the reserve ratio was 1.15%. On the acquired portfolio, the credit component of the loan purchase discount remains greater than an imputed reserve.

Total assets were $677.7 million at December 31, 2019, an increase of $22.4 million, or 3.4%, from $655.3 million at December 31, 2018. Total loans held for investment were $430.4 million as compared to $407.3 million at December 31, 2018, reflecting an increase of 5.67%. 

Total deposits were $586.7 million at year-end, an increase of $28.9 million, or 5.18%, from $557.8 million at December 31, 2018. Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased to $498.4 million at December 31, 2019 from $497.7 million at December 31, 2018. Core deposits now comprise 85.0% of total deposits. 

Nonperforming assets were $2.1 million at December 31, 2019, an increase from $1.7 million at December 31, 2018. Nonperforming assets represented 0.31% of total assets at December 31, 2019. 

Shareholder equity increased to $73.6 million at December 31, 2019, from $64.4 million at December 31, 2018. At December 31, 2019, tangible book value per share was $8.27 per share compared to $7.10 per share at December 31, 2018. 

Capital Management

The Company's consolidated capital ratios and the Bank's capital ratios continue to exceed the regulatory guidelines for a well-capitalized financial institution. At December 31, 2019, the Bank reported the following capital ratios:

Common Equity Tier 1 Capital Ratio 14.00%
Tier 1 Leverage Ratio 10.81%
Tier 1 Capital Ratio 14.00%
Total Capital Ratio  14.94%
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About the Company

State Bank Corp., headquartered in Lake Havasu City, Arizona, is the parent company of State Bank of Arizona, the largest locally-owned bank in Arizona. State Bank of Arizona 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. Specializing in providing exceptional customer service and investing in its local communities, State Bank of Arizona was named 2018 Bank of the Year by Western Independent Bankers. The Bank has ten full-service branches: two in Lake Havasu City, two in Kingman, two in Prescott, one in Bullhead City, one in Prescott Valley, one in Phoenix, and one in Cottonwood, Arizona. The Company is traded over-the-counter as ("SBAZ"). For further information, please visit the web site: www.statebankaz.com

In June 2019, State Bank Corp. was ranked #69 on the American Banker Magazine's list of Top 200 Publicly Traded Community Banks and Thrifts with Assets Under $2 Billion list for 2019 based on three-year average return on equity ("ROE") as of 12/31/18.

Forward-looking Statements

This press release may include forward-looking statements about State Bank Corp. and State Bank of Arizona. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. 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. 
Statement of Operations 
  
  For the Quarter Ended
  Year to Date
Dollars in thousands - Unaudited12/31/2019
 9/30/2019
 12/31/2018
  12/31/201912/31/2018
Statements of Operations                
Interest income                
Loans, including fees$5,891 $5,806 $ 5,612  $23,528 $21,251 
Securities 832  884  891   3,387   3,588 
Fed funds and other 176  271  100   850  446 
Total interest income 6,899  6,961  6,603    27,765  25,285 
                 
Interest expense                
Deposits 623  730  338   2,686  1,033 
Borrowings  115  121   205   641  611 
Total interest expense 738  851  543   3,327  1,644 
                 
Net interest income 6,161  6,110  6,060   24,438  23,641 
                 
Provision for loan losses 315  -  137   665  490 
Net interest income after loan loss provision  5,846  6,110   5,923   23,773  23,151 
                 
Noninterest income                
Service charges on deposits 184  181  190   711  648 
Mortgage loan fees 396  335  394   1,293  1,225 
Gain on sale of loans 946  691  360   2,510  1,744 
Other income 407  371  618   1,659  2,069 
Total noninterest income 1,933  1,578  1,562   6,173  5,686 
                 
Noninterest expense                
Salaries and employee benefits 3,233  2,910  2,892   11,868  10,907 
Net occupancy expense 201  207  195   787  783 
Equipment expense 51  59  91   248  348 
Data processing 457  485  525   1,988  1,871 
Director fees & expenses 102  54  133   317  355 
Insurance 106  35  36   212  136 
Marketing & promotion 109  203  82   574  570 
Professional fees 341  247  98   841  726 
Office expense 27  32  62   131  141 
Regulatory assessments 11  9  53   132  228 
OREO and repossessed assets (19) 12  (95)  117  (53)
Other expenses 442  491  672   1,880  1,962 
  5,061  4,744  4,744   19,095  17,974 
                 
Acquisition related costs 873  -  -   873  - 
                 
Total noninterest expense 5,934  4,744  4,744   19,968  17,974 
                 
                 
Income (loss) before provision (benefit) for income taxes 1,845  2,944  2,741   9,978  10,863 
                 
Provision (benefit) for income taxes 491  554  458   2,157  2,282 
Net Income (Loss)$1,354 $2,390 $2,283  $7,821 $8,581 
                 
                 
 Per Share Data                 
Basic EPS$0.17 $0.30 $0.28  $0.97 $1.06 
Diluted EPS$0.17 $0.29 $0.28  $0.96 $1.06 
                 
Average shares outstanding                
Basic 8,093,299  8,093,299  8,065,709   8,088,153  8,060,929 
Effect of dilutive shares 21,467  21,524  26,581   25,218  30,352 
Diluted 8,114,766  8,114,823  8,092,290   8,113,371  8,091,281 


State Bank Corp.   
Balance Sheets   
   
    
Dollars in thousands - Unaudited12/31/20199/30/201912/31/2018
Consolidated Balance Sheets   
    
Assets   
Cash and cash equivalents$3,391 $4,042 $4,061 
Interest bearing deposits 7,431  6,793  4,106 
Overnight Funds 37,300  46,030  17,960 
Available for sale securities 151,968  168,470  179,589 
Total cash and securities 200,090  225,335  205,716 
          
Loans held for sale, before reserves 8,841  15,497  2,375 
Gross loans held for investment 430,396  397,187  407,264 
Loan loss reserve (4,801) (4,546) (3,824)
Total net loans 434,436  408,138  405,815 
          
Premises and equipment, net 14,719  14,912  14,315 
Other real estate owned 307  307  266 
Federal Home Loan Bank and other stock 5,985  6,051  6,249 
Company owned life insurance 11,554  11,489  11,802 
Other assets 10,563  10,680  11,174 
          
Total Assets$677,654 $676,912 $655,337 
          
          
Liabilities         
Non interest bearing demand$133,299 $136,287 $135,485 
Money market, NOW and savings 365,118  358,733  362,202 
Time deposits <$250K 64,347  67,717  51,845 
Time deposits >$250K 23,924  24,079  8,299 
Total Deposits 586,688  586,816  557,831 
          
Securities sold under repurchase agreements 7,450  7,136  5,001 
Federal Home Loan Bank advances -  -  18,000 
Subordinated debt, net of debt issuance costs 6,572  6,690  7,045 
Total Debt 14,022  13,826  30,046 
          
Other Liabilities 3,303  3,519  3,086 
Total Liabilities 604,013  604,161  590,963 
          
          
Shareholders' Equity         
Common stock 39,892  39,850  39,597 
Accumulated retained earnings 33,225  32,478  27,831 
Accumulated other comprehensive income 524  423  (3,054)
Total shareholders equity 73,641  72,751  64,374 
          
Total liabilities and shareholders' equity$677,654 $676,912 $655,337 
          


State Bank Corp. 
Five-Quarter Performance Summary 
  
  For the Quarter Ended
Dollars in thousands - Unaudited12/31/20196/30/20196/30/20193/31/201912/31/2018
Performance Highlights     
      
Earnings:     
Total revenue (Net int. income + nonint. income)$8,094 $7,688 $7,449 $7,379 $7,622 
Net interest income$6,161 $6,110 $6,071 $6,095 $6,060 
Provision for loan losses$315 $- $50 $300 $137 
Noninterest income$1,933 $1,578 $1,378 $1,284 $1,562 
Noninterest expense$5,934 $4,744 $4,524 $4,766 $4,744 
Net income (loss)$1,354 $2,390 $2,252 $1,824 $2,282 
      
Per Share Data:     
Net income (loss), basic$0.17 $0.30 $0.28 $0.23 $0.28 
Net income (loss), diluted$0.17 $0.29 $0.28 $0.22 $0.28 
Cash dividends declared$0.075 $0.075 $0.075 $0.08 $0.06 
Book value$9.10 $8.99 $8.71 $8.28 $7.98 
Tangible book value$8.27 $8.14 $7.86 $7.42 $7.10 
      
Performance Ratios:     
Return on average assets 0.80%  1.41%  1.32%  1.10%  1.41% 
Return on average equity 7.37%  13.23%  13.07%  11.06%  14.53% 
Net interest margin, taxable equivalent 3.82%  3.78%  3.75%  3.85%  3.90% 
Average cost of funds 0.49%  0.56%  0.61%  0.54%  0.38% 
Average yield on loans 5.55%  5.63%  5.68%  5.70%  5.61% 
Efficiency ratio 73.31%  61.71%  60.73%  64.59%  62.24% 
Non-interest income to total revenue 23.88%  20.53%  18.50%  17.40%  20.49% 
      
Capital & Liquidity:     
Total equity to total assets (EOP) 10.87%  10.75%  10.39%  9.94%  9.82% 
Tangible equity to tangible assets 9.97%  9.84%  9.47%  9.00%  8.84% 
Total loans to total deposits 74.87%  70.33%  69.87%  71.25%  73.43% 
Mohave State Bank     
Common equity tier 1 ratio 14.00%  14.44%  13.91%  13.49%  13.18% 
Tier 1 leverage ratio 10.81%  10.66%  10.40%  10.39%  10.42% 
Tier 1 risk based capital 14.00%  14.44%  13.91%  13.49%  13.18% 
Total risk based capital 14.94%  15.37%  14.83%  14.32%  13.94% 
      
Asset Quality:     
Gross charge-offs$70 $2 $15 $88 $- 
Net charge-offs (NCOs)$58 $1 $(356)$(15)$(2)
NCO to average loans, annualized 0.05%  0.00%  -0.34%  -0.01%  0.00% 
Non-accrual loans/securities$1,768 $2,051 $2,415 $1,302 $1,391 
Other real estate owned$307 $307 $- $174 $266 
Repossessed assets$- $- $- $- $- 
Non-performing assets (NPAs)$2,075 $2,358 $2,415 $1,476 $1,657 
NPAs to total assets 0.31%  0.35%  0.36%  0.22%  0.25% 
Loans >90 days past due$- $- $- $- $- 
NPAs + 90 days past due$2,075 $2,358 $2,415 $1,476 $1,657 
NPAs + loans 90 days past due to total assets 0.31%  0.35%  0.36%  0.22%  0.25% 
Allowance for loan losses to total loans 1.09%  1.10%  1.10%  0.99%  0.93% 
Allowance for loan losses to NPAs 231.37%  192.79%  188.24%  280.42%  230.78% 
      
Period End Balances:     
Assets$677,654 $676,912 $678,570 $673,336 $655,337 
Total Loans (before reserves)$439,237 $412,684 $413,636 $417,333 $409,639 
Deposits$586,688 $586,816 $591,989 $585,732 $557,831 
Stockholders' equity$73,641 $72,751 $70,514 $66,919 $64,374 
Common stock market capitalization$149,726 $105,213 $97,120 $104,646 $99,208 
Full-time equivalent employees 117  120  120  122  124 
Shares outstanding 8,093,299  8,093,299  8,093,299  8,080,791  8,065,709 
      
Average Balances:     
Assets$678,173 $680,038 $680,037 $664,121 $649,673 
Earning assets$647,793 $649,501 $650,744 $636,755 $623,584 
Total Loans (before reserves)$424,857 $412,295 $415,774 $415,998 $400,116 
Deposits$587,653 $591,694 $596,079 $562,399 $560,343 
Other borrowings$13,681 $13,422 $12,457 $33,995 $17,649 
Stockholders' equity$73,499 $72,272 $68,902 $65,986 $62,844 
Shares outstanding, basic - wtd 8,093,299  8,093,299  8,090,000  8,075,764  8,065,709 
Shares outstanding, diluted - wtd 8,114,766  8,114,823  8,115,299  8,108,423  8,092,290 


Contact: Brian M. Riley, President & CEO
  Craig Wenner, EVP & CFO
  928 855 0000
  www.mohavestbank.com

 

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