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State Bank Financial Corporation Reports Second Quarter 2015 Financial Results

20:00 EDT 22 Jul 2015 | Globe Newswire

  • Recorded a one-time after-tax charge of $8.9 million related to early termination of loss share agreements with the FDIC, resulting in a net loss of $2.0 million during the second quarter
  • Second quarter 2015 operating income of $7.7 million, or $.20 per diluted share
  • Solid growth in noninterest income key initiatives
  • $42 million of net loan growth, including run-off from purchased loans



ATLANTA, July 23, 2015 (GLOBE NEWSWIRE) -- State Bank Financial Corporation (NASDAQ:STBZ) today announced unaudited financial results for the quarter ended June 30, 2015.  After incorporating our previously disclosed one-time pre-tax charge of $14.5 million that resulted from the early termination of our loss share agreements, net loss for the second quarter of 2015 was $2.0 million, compared to net income of $7.5 million for the second quarter of 2014 and net income of $9.2 million for the first quarter of 2015.  Fully diluted loss per share was $.06 in the second quarter of 2015 compared to fully diluted earnings per share of $.22 in the second quarter of 2014 and fully diluted earnings per share of $.25 in the first quarter of 2015.  On an operating basis, income for the second quarter of 2015 was $7.7 million, or $.20 per fully diluted share. 

Joe Evans, Chairman and CEO, commented, "The big event of the second quarter was the early termination of our FDIC loss share agreements with a related one-time charge that led to negative earnings.  I am extremely pleased to have accomplished early termination and remain highly confident that the financial benefits will allow us to recover this charge within five quarters as we previously announced.  We continue to experience strong organic loan and noninterest-bearing deposit growth and reap the benefits of our focus on key noninterest income initiatives.  These fundamentals produced another quarter of solid operating results with strong momentum carrying over into the second half of the year." 

Operating Highlights 

Net interest income of $33.5 million in the second quarter of 2015 decreased from $39.1 million in the first quarter of 2015 due to lower accretion income on loans, but increased from $33.1 million in the second quarter of 2014.  Interest income on loans, excluding purchased credit impaired loans, for the second quarter of 2015 was $23.1 million, up $1.7 million from $21.4 million in the prior quarter and up $7.8 million from $15.4 million in the second quarter of 2014.  Accretion income on loans was $8.4 million in the second quarter of 2015, down from $16.1 million in the first quarter of 2015 due primarily to larger gains from early loan payoffs in the previous quarter as well as a loan pool that closed out in the first quarter of 2015.  Base accretion declined $1.3 million in the second quarter of 2015 compared to the prior quarter.   As of June 30, 2015, approximately $104 million of accretable discount remains to be recognized as loan accretion income, compared to $110 million of accretable discount remaining at the end of the first quarter of 2015.  Interest expense of $2.0 million in the second quarter of 2015 was essentially flat compared to the prior quarter.  Cost of funds for the second quarter of 2015 was 29 basis points, unchanged from the first quarter of 2015 and down six basis points from the second quarter of 2014.

The organic loan portfolio continued to perform well in the second quarter of 2015 as past due organic loans represented only .08% of total organic loans.  The provision for loan losses was $64 thousand in the second quarter of 2015, a decrease of $3.1 million compared to the first quarter of 2015, of which $2.3 million was related to purchased credit impaired loans. 

Noninterest income, excluding (amortization)/accretion of the FDIC receivable for loss share agreements, was $9.3 million for the second quarter of 2015, compared to $10.3 million in the first quarter of 2015.  The first quarter of 2015 included $380 thousand in securities gains and $2.0 million in prepayment fees. In the second quarter of 2015, we continued to experience solid growth in our noninterest income key initiatives as income from mortgage banking of $3.5 million and SBA lending of $1.4 million were up $800 thousand and $257 thousand, respectively, from the previous quarter.  Payroll fee income of $956 thousand increased versus the prior year period, but was down from the previous quarter due to what is typically a seasonally strong first quarter.   

On May 21, 2015, State Bank entered into an agreement with the FDIC to terminate the loss share agreements on all 12 FDIC-assisted acquisitions that occurred in 2009, 2010 and 2011, resulting in a pre-tax charge of approximately $14.5 million for the second quarter of 2015.  Approximately $9.3 million of the one-time pre-tax charge was related to amortization scheduled to be recognized during future quarters, with the remainder primarily consisting of the payment made to the FDIC to eliminate all rights and obligations between State Bank and the FDIC, most significantly the elimination of the FDIC's right to share in the recovery of losses previously recognized under loss share.  State Bank will now retain 100% of future recoveries instead of retaining either 5% or 20% of future recoveries as provided in the now terminated loss share agreements.   

Total noninterest expense for the second quarter of 2015 was $31.4 million, a $1.3 million increase from
the first quarter of 2015, due primarily to higher merger-related expenses and salary and benefit costs largely as a result of severance related to the early termination of loss share.  Merger-related expenses totaled $876 thousand in the second quarter of 2015, up from $137 thousand in the first quarter of 2015.  Severance expenses totaled $443 thousand in the second quarter of 2015, compared to $365 thousand in the first quarter of 2015.   

Financial Condition   

Total assets at June 30, 2015 were $3.3 billion, down from $3.4 billion at March 31, 2015 but up from $2.6 billion at June 30, 2014.  Period-end organic loans increased to $1.5 billion at June 30, 2015, a net increase of $90.8 million from the first quarter of 2015 and $294.0 million from the second quarter of 2014.  Approximately $10.5 million of the growth in organic loans was related to loan renewals of purchased non-credit impaired loans that migrated into organic loans.  Purchased non-credit impaired loans decreased $35.3 million from the first quarter of 2015 to $340.5 million, and purchased credit impaired loans decreased to $177.4 million at the end of the second quarter of 2015, a $13.5 million linked-quarter decline.  Total net loans, excluding loans held for sale, were $2.0 billion at June 30, 2015, up $42.4 million from the first quarter of 2015. 

Total deposits at June 30, 2015 were $2.7 billion, down from $2.8 billion at the end of the first quarter of 2015 but up from $2.1 billion at the end of the second quarter of 2014.  Period-end noninterest-bearing demand deposits increased $70.2 million from the first quarter of 2015 and represented 27.9% of total deposits as of June 30, 2015.  Average noninterest-bearing demand deposits increased $90.6 million from the first quarter of 2015.  Average transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $105.7 million from the first quarter of 2015.   

Tangible book value per share was $13.51 at the end of the second quarter of 2015.  State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 14.78% and a Tier I risk-based capital ratio of 18.83%. 

Branch Closures 

As part of our ongoing strategy to deploy personnel and resources more efficiently, State Bank consolidated three branch offices in Middle Georgia in the second quarter of 2015.  After completing the First Bank of Georgia conversion, which is scheduled for the weekend of July 25-26, 2015, State Bank will operate 26 banking offices in three primary markets: Metro Atlanta (7), Middle Georgia (12), and Augusta (7), as well as five mortgage origination offices in the Atlanta, Augusta and Savannah, Georgia markets. 

Detailed Results 

Supplemental tables displaying financial results for the second quarter of 2015, the previous four quarters and the first half of 2015 are included with this press release. 

Non-GAAP Financial Measures 

This press release contains certain performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  For more information on this topic, please refer to 2Q15 Financial Supplement: Table 2, Condensed Operating Results to GAAP Earnings Reconciliation, on page 7. 

Conference Call 

Chief Executive Officer Joe Evans, President Tom Wiley, Chief Financial 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:  1.800.743.9807 

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

About State Bank Financial Corporation 

State Bank Financial Corporation (NASDAQ:STBZ), with approximately $3.3 billion in assets at June 30, 2015, is an Atlanta-based bank holding company for State Bank and Trust Company and First Bank of Georgia.  As of June 30, 2015, State Bank operated 19 banking offices in Metro Atlanta and Middle Georgia and one mortgage origination office in metro Atlanta.  First Bank of Georgia operated seven banking offices and four mortgage origination offices in the Augusta and Savannah, Georgia MSAs.

To learn more about State Bank, visit www.statebt.com

The State Bank Financial Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=14370

Cautionary Note Regarding Forward-Looking Statements

Certain statements on our conference call may be "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,” “plan,” “seek,” “believe,” “expect,” “strategy,” “future,” “likely,” “project,” “may,” “should,” “will” and similar references to future periods.  Examples of forward-looking statements include, among others, the expected future financial benefits of our early termination of loss share coverage and our operating momentum carrying into the second half of 2015.  Such forward-looking statements are subject to risks, uncertainties, and other factors, such as a downturn in the economy, unanticipated losses related to the integration of, and accounting for, acquired assets and assumed liabilities in our acquisitions, access to funding sources, greater than expected noninterest expenses, volatile credit and financial markets both domestic and foreign, potential deterioration in real estate values, regulatory changes and excessive loan losses, 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. See Item 1A, Risk Factors, in our Annual Report on Form 10-K for the most recently ended fiscal year, for a description of some of the important factors that may affect actual outcomes.

 

State Bank Financial Corporation
2Q15 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
            2Q15 change vs
(Dollars in thousands, except per share  amounts; taxable equivalent) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
               
Income Statement Highlights              
Interest income on loans $23,174  $21,498  $17,496  $16,237  $15,416  1,676  7,758 
Accretion income on loans 8,365  16,069  14,124  21,110  17,087  (7,704) (8,722)
Interest income on invested funds 4,037  3,629  2,932  2,552  2,533  408  1,504 
Total interest income 35,576  41,196  34,552  39,899  35,036  (5,620) 540 
Interest expense 1,972  1,979  1,923  1,857  1,846  (7) 126 
Net interest income 33,604  39,217  32,629  38,042  33,190  (5,613) 414 
Provision for loan losses 64  3,193  1,189  416  701  (3,129) (637)
(Amortization) accretion of FDIC receivable for loss share agreements (2) (492) (1,448) 1,652  (196) (1,949) 956  1,457 
Noninterest income 9,328  10,257  5,285  3,624  3,348  (929) 5,980 
Total operating noninterest income (2) 8,836  8,809  6,937  3,428  1,399  27  7,437 
Operating noninterest expense (3) 30,047  29,592  23,999  22,207  21,794  455  8,253 
Operating income before taxes (2)(3) 12,329  15,241  14,378  18,847  12,094  (2,912) 235 
Operating income tax expense (2)(3) 4,618  5,729  5,689  7,157  4,415  (1,111) 203 
Operating income (2)(3) 7,711  9,512  8,689  11,690  7,679  (1,801) 32 
Loss share expense termination, net of tax benefit (8,923)         (8,923) (8,923)
Severance costs, net of tax benefit (272) (224) (916) (49) (10) (48) (262)
Merger-related expenses, net of tax benefit (537) (84) (188) (137) (162) (453) (84)
Net income (loss) available to common shareholders $(2,021) $9,204  $7,585  $11,504  $7,507  $(11,225) $(9,528)
               
Common Share Data              
Basic net income (loss) per share $(.06) $.27  $.24  $.36  $.23  $(.33) $(.29)
Diluted net income (loss) per share (4) (.06) .25  .22  .34  .22  (.31) (.28)
Cash dividends declared per share .06  .05  .04  .04  .04  .01  .02 
Book value per share 14.62  14.81  14.38  14.20  13.95  (.19) .67 
Tangible book value per share 13.51  13.70  13.97  13.83  13.58  (.19) (.07)
Market price per share (quarter end) 21.70  21.00  19.98  16.24  16.91  .70  4.79 
               
Common Shares Outstanding              
Common stock 35,763,791  35,738,850  32,269,604  32,271,466  32,130,645  24,941  3,633,146 
Weighted average shares outstanding:              
Basic 35,741,761  34,373,665  32,271,537  32,206,889  32,126,260  1,368,096  3,615,501 
Diluted (4) 35,741,761  36,437,322  33,935,366  33,755,595  33,589,797  (695,561) 2,151,964 
               
Average Balance Sheet Highlights              
Loans, excluding purchased credit impaired $1,920,219  $1,791,537  $1,430,495  $1,246,008  $1,192,494  $128,682  $727,725 
Purchased credit impaired loans 179,579  194,471  214,518  215,318  236,178  (14,892) (56,599)
Assets 3,316,424  3,323,713  2,858,209  2,609,776  2,591,025  (7,289) 725,399 
Deposits 2,746,818  2,716,084  2,339,566  2,125,659  2,108,595  30,734  638,223 
Liabilities 44,347  82,361  57,506  35,135  38,255  (38,014) 6,092 
Equity 525,259  525,268  461,137  448,982  444,175  (9) 81,084 
Tangible common equity 485,337  485,087  447,641  437,038  432,073  250  53,264 
               

 

State Bank Financial Corporation
2Q15 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
            2Q15 change vs
(Dollars in thousands, except per share  amounts; taxable equivalent) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
               
Key Metrics              
Operating return on average assets (1)(2)(3) .93% 1.16% 1.21% 1.78% 1.19% (.23) (.26)
Operating return on average equity (1)(2)(3) 5.89  7.34  7.48  10.33  6.93  (1.45) (1.04)
Return on average assets (1) (.24) 1.12  1.05  1.75  1.16  (1.36) (1.40)
Return on average equity (1) (1.54) 7.11  6.53  10.17  6.78  (8.65) (8.32)
Yield on earning assets (1) 4.58  5.37  5.08  6.44  5.86  (.79) (1.28)
Cost of funds .29  .29  .33  .35  .35    (.06)
Rate on interest-bearing liabilities .39  .38  .43  .45  .45  .01  (.06)
Net interest margin (1) 4.33  5.11  4.80  6.14  5.55  (.78) (1.22)
Average equity to average assets 15.84  15.80  16.13  17.20  17.14  .04  (1.30)
Leverage ratio 14.78  15.00  15.90  17.16  16.84  (.22) (2.06)
Tier I risk-based capital ratio 18.83  19.51  23.12  25.17  27.06  (.68) (8.23)
Total risk-based capital ratio 19.98  20.70  24.37  26.42  28.32  (.72) (8.34)
Efficiency ratio (1) 112.46  62.66  65.20  54.28  63.82  49.80  48.64 
Average loans to average deposits 76.44  73.12  70.31  68.75  67.75  3.32  8.69 
Noninterest-bearing deposits to total deposits 27.85  24.91  24.14  24.33  21.82  2.94  6.03 


(1) Income annualized for the applicable period.
(2) Excludes the one-time loss share expense termination charge of $14.6 million, net of income tax benefit of $5.6 million, in the second quarter of 2015
(3) Excludes severance costs and merger-related expenses.
(4) Since the Company had a net loss for the three month period ended June 30, 2015, all potential common shares were excluded from the calculation of diluted earnings per share as they would have had an anti-dilutive effect for the period.

 

State Bank Financial Corporation
2Q15 Financial Supplement: Table 2
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
           2Q15 change vs
(dollars in thousands, except per share amounts; taxable equivalent)2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
              
Interest income reconciliation             
Interest income - taxable equivalent$35,576  $41,196  $34,552  $39,899  35,036  (5,620) 540 
Taxable equivalent adjustment(109) (125) (84) (82) (77) 16  (32)
Interest income (GAAP)$35,467  $41,071  $34,468  $39,817  $34,959  $(5,604) $508 
              
Net interest income reconciliation             
Net interest income - taxable equivalent$33,604  $39,217  $32,629  $38,042  33,190  (5,613) 414 
Taxable equivalent adjustment(109) (125) (84) (82) (77) 16  (32)
Net interest income (GAAP)$33,495  $39,092  $32,545  $37,960  $33,113  $(5,597) $382 
              
(Amortization) accretion of FDIC receivable for loss share agreements             
(Amortization) accretion of FDIC receivable for loss share agreements$(492) $(1,448) $1,652  $(196) $(1,949) $956  $1,457 
Loss share termination(14,548)         (14,548) (14,548)
(Amortization) accretion of FDIC receivable for loss share agreements (GAAP)$(15,040) $(1,448) $1,652  $(196) $(1,949) $(13,592) $(13,091)
              
Total operating noninterest income reconciliation             
Operating noninterest income$8,836  $8,809  $6,937  $3,428  $1,399  $27  $7,437 
Loss share termination(14,548)         (14,548) (14,548)
Total noninterest income (GAAP)$(5,712) $8,809  $6,937  $3,428  $1,399  $(14,521) $(7,111)
              
Operating noninterest expense reconciliation             
Operating expense$30,047  $29,592  $23,999  $22,207  $21,794  $455  $8,253 
Merger-related expenses876  137  306  223  265  739  611 
Severance costs443  365  1,494  80  17  78  426 
Total noninterest expense (GAAP)$31,366  $30,094  $25,799  $22,510  $22,076  $1,272  $9,290 
              
Operating income before taxes reconciliation             
Operating income before taxes$12,329  $15,241  $14,378  $18,847  $12,094  $(2,912) $235 
Loss share termination(14,548)         (14,548) (14,548)
Merger-related expenses(876) (137) (306) (223) (265) (739) (611)
Severance costs(443) (365) (1,494) (80) (17) (78) (426)
Taxable equivalent adjustment(109) (125) (84) (82) (77) 16  (32)
Income (loss) before taxes (GAAP)$(3,647) $14,614  12,494  18,462  $11,735  $(18,261) $(15,382)
              
State Bank Financial Corporation
2Q15 Financial Supplement: Table 2 (continued)
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
           2Q15 change vs
(dollars in thousands, except per share amounts; taxable equivalent)2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Income tax expense reconciliation             
Operating income tax expense$4,618  5,729  5,689  7,157  4,415  (1,111) 203 
Loss share termination(5,625)         (5,625) (5,625)
Merger-related expenses(339) (53) (118) (86) (103) (286) (236)
Severance costs(171) (141) (578) (31) (7) (30) (164)
Taxable equivalent adjustment(109) (125) (84) (82) (77) 16  (32)
Income tax expense (GAAP)$(1,626) $5,410  $4,909  $6,958  $4,228  $(7,036) $(5,854)
              
Book value per common share reconciliation             
Tangible book value per common share$13.51  $13.70  $13.97  $13.83  $13.58  $(.19) $(.07)
Effect of goodwill and other intangibles1.11  1.11  .41  .37  .37    .74 
Book value per common share (GAAP)$14.62  $14.81  $14.38  $14.20  $13.95  $(.19) $.67 

 

(1) Management evaluates the capital position and operating performance of State Bank Financial Corporation (the “Company”) by using certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), including:  interest income - taxable equivalent, net interest income - taxable equivalent, (amortization) accretion of FDIC receivable for loss share agreements, operating income before taxes - taxable equivalent, income tax expense, and tangible book value per common share.  The Company has included these non-GAAP financial measures in this press release for the applicable periods presented.  Management believes that the presentation of these non-GAAP financial measures (a) provides important supplemental information that contributes to a proper understanding of the Company’s operating performance, (b) enables a more complete understanding of factors and trends affecting the Company’s business, and (c) allows investors to evaluate the Company’s performance in a manner similar to management, the financial services industry, bank stock analysts, and bank regulators.  Management uses non-GAAP measures as follows: preparation of the Company’s operating budgets, monthly financial performance reporting, and presentation to investors of Company performance.   

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the accompanying table.  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 substitutes for GAAP financial measures, and the Company strongly encourages 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.

  

State Bank Financial Corporation
2Q15 Financial Supplement: Table 3
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
            2Q15 change vs
(Dollars in thousands) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
               
Assets              
Cash and amounts due from depository institutions $21,903  $20,426  $10,550  $17,209  $8,333  $1,477  $13,570 
Interest-bearing deposits in other financial institutions 179,831  285,971  470,608  459,271  499,400  (106,140) (319,569)
Cash and cash equivalents 201,734  306,397  481,158  476,480  507,733  (104,663) (305,999)
Investment securities available-for-sale 815,277  819,609  640,086  532,447  494,874  (4,332) 320,403 
Loans 2,042,186  2,000,189  1,634,529  1,504,725  1,441,606  41,997  600,580 
Allowance for loan and lease losses (1) (29,569) (29,982) (28,638) (27,231) (35,607) 413  6,038 
Loans, net 2,012,617  1,970,207  1,605,891  1,477,494  1,405,999  42,410  606,618 
Loans held-for-sale 64,047  45,211  3,174  1,283  726  18,836  63,321 
Other real estate owned 15,055  16,848  8,568  15,169  23,938  (1,793) (8,883)
Premises and equipment, net 45,608  46,370  35,286  34,696  34,820  (762) 10,788 
Goodwill 31,049  30,510  10,606  10,381  10,381  539  20,668 
Other intangibles, net 8,922  9,045  2,752  1,511  1,663  (123) 7,259 
SBA servicing rights 2,185  1,902  1,516      283  2,185 
FDIC receivable for loss share agreements   17,098  22,320  26,221  44,775  (17,098) (44,775)
Bank-owned life insurance 57,810  57,348  41,479  41,136  40,803  462  17,007 
Other assets 46,004  31,363  29,374  30,779  20,093  14,641  25,911 
Total assets $3,300,308  $3,351,908  $2,882,210  $2,647,597  $2,585,805  $(51,600) $714,503 
Liabilities and Shareholders’ Equity              
Noninterest-bearing deposits $762,100  $691,938  $577,295  $524,634  $461,434  $70,162  $300,666 
Interest-bearing deposits 1,974,185  2,085,997  1,814,387  1,631,340  1,653,779  (111,812) 320,406 
Total deposits 2,736,285  2,777,935  2,391,682  2,155,974  2,115,213  (41,650) 621,072 
Securities sold under agreements to repurchase 11,747  8,250        3,497  11,747 
Notes payable 2,765  2,769  2,771  2,776  2,779  (4) (14)
Other liabilities 26,527  33,708  23,662  30,570  19,506  (7,181) 7,021 
Total liabilities 2,777,324  2,822,662  2,418,115  2,189,320  2,137,498  (45,338) 639,826 
Total shareholders’ equity 522,984  529,246  464,095  458,277  448,307  (6,262) 74,677 
Total liabilities and shareholders’ equity $3,300,308  $3,351,908  $2,882,210  $2,647,597  $2,585,805  $(51,600) $714,503 
               
Capital Ratios (2)              
Average equity to average assets 15.84% 15.80% 16.13% 17.20% 17.14% .04% (1.30)%
Leverage ratio 14.78  15.00  15.90  17.16  16.84  (.22) (2.06)
CET1 risk-based capital ratio 18.83  19.51  N/A  N/A  N/A  (.68) N/A 
Tier I risk-based capital ratio 18.83  19.51  23.12  25.17  27.06  (.68) (8.23)
Total risk-based capital ratio 19.98  20.70  24.37  26.42  28.32  (.72) (8.34)

 

(1)  Allowance for loan losses on purchased credit impaired loans was approximately $9.9 million at 2Q15, $10.6 million at 1Q15, $10.2 million at 4Q14, $8.4 million at 3Q14 and $17.7 million at 2Q14.
(2)  Beginning January 1, 2015, the Company's ratios are calculated using the Basel III framework. Capital ratios for prior periods were calculated using the Basel I framework. The Common Equity Tier 1 (CET1) capital ratio is a new ratio introduced under the Basel III framework.

 

State Bank Financial Corporation
2Q15 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Quarterly (Unaudited)
            2Q15 change vs
(Dollars in thousands, except per share  amounts) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
               
Net Interest Income:              
Interest income on loans $23,070  $21,400  $17,416  $16,162  $15,350  $1,670  $7,720 
Accretion income on loans 8,365  16,069  14,124  21,110  17,087  (7,704) (8,722)
Interest income on invested funds 4,032  3,602  2,928  2,545  2,522  430  1,510 
Interest expense 1,972  1,979  1,923  1,857  1,846  (7) 126 
Net interest income 33,495  39,092  32,545  37,960  33,113  (5,597) 382 
Provision for loan losses 64  3,193  1,189  416  701  (3,129) (637)
Net interest income after provision for loan losses 33,431  35,899  31,356  37,544  32,412  (2,468) 1,019 
Noninterest Income:              
(Amortization) accretion of FDIC receivable for loss share agreements (15,040) (1,448) 1,652  (196) (1,949) (13,592) (13,091)
Service charges on deposits 1,501  1,489  1,274  1,206  1,196  12  305 
Mortgage banking income 3,480  2,680  322  191  163  800  3,317 
Payroll fee income 956  1,158  1,050  875  822  (202) 134 
SBA income 1,380  1,123  477      257  1,380 
ATM income 773  725  624  621  636  48  137 
Bank-owned life insurance income 462  455  343  333  329  7  133 
Gain (loss) on sale of investment securities (59) 380  223    12  (439) (71)
Other 835  2,247  972  398  190  (1,412) 645 
Total noninterest income (5,712) 8,809  6,937  3,428  1,399  (14,521) (7,111)
Noninterest Expense:              
Salaries and employee benefits 20,506  19,582  17,797  14,644  14,575  924  5,931 
Occupancy and equipment 3,219  3,105  2,615  2,440  2,314  114  905 
Data processing 2,435  2,280  1,909  1,758  1,714  155  721 
Legal and professional fees 1,284  1,484  844  851  731  (200) 553 
Merger-related expenses 876  137  306  223  265  739  611 
Marketing 599  436  491  453  548  163  51 
Federal deposit insurance premiums and other regulatory fees 455  506  393  356  337  (51) 118 
Loan collection and OREO costs (114) 405  (112)   (32) (519) (82)
Amortization of intangibles 442  417  257  152  161  25  281 
Other 1,664  1,742  1,299  1,633  1,463  (78) 201 
Total noninterest expense 31,366  30,094  25,799  22,510  22,076  1,272  9,290 
Income (Loss) Before Income Taxes (3,647) 14,614  12,494  18,462  11,735  (18,261) (15,382)
Income tax expense (benefit) (1,626) 5,410  4,909  6,958  4,228  (7,036) (5,854)
Net Income (Loss) $(2,021) $9,204  $7,585  $11,504  $7,507  $(11,225) $(9,528)
               
Net Income (Loss) Per Share              
Basic $(.06) $.27  $.24  $.36  $.23  $(.33) $(.29)
Diluted (.06) .25  .22  .34  .22  (.31) (.28)
Weighted Average Shares Outstanding              
Basic 35,741,761  34,373,665  32,271,537  32,206,889  32,126,260  1,368,096  3,615,501 
Diluted 35,741,761  36,437,322  33,935,366  33,755,595  33,589,797  (695,561) 2,151,964 

  

State Bank Financial Corporation
2Q15 Financial Supplement: Table 5
Condensed Consolidated Income Statements
Year to Date (Unaudited)
  Six Months Ended June 30 YTD Change
(Dollars in thousands, except per share amounts) 2015 2014 
       
Net Interest Income:      
Interest income on loans $44,470  $30,598  $13,872 
Accretion income on loans 24,434  43,623  (19,189)
Interest income on invested funds 7,634  5,015  2,619 
Interest expense 3,951  3,740  211 
Net interest income 72,587  75,496  (2,909)
Provision for loan losses 3,257  1,291  1,966 
Net interest income after provision for loan losses 69,330  74,205  (4,875)
Noninterest Income:      
Amortization of FDIC receivable for loss share agreements (16,488) (17,241) 753 
Service charges on deposits 2,990  2,354  636 
Mortgage banking income 6,160  322  5,838 
Payroll fee income 2,114  1,775  339 
SBA income 2,503    2,503 
ATM income 1,498  1,226  272 
Bank-owned life insurance income 917  658  259 
Gain on sale of investment securities 321  23  298 
Other 3,082  120  2,962 
Total noninterest income 3,097  (10,763) 13,860 
Noninterest Expense:      
Salaries and employee benefits 40,088  29,652  10,436 
Occupancy and equipment 6,324  4,843  1,481 
Data processing 4,715  3,386  1,329 
Legal and professional fees 2,768  1,745  1,023 
Merger-related expenses 1,013  265  748 
Marketing 1,035  880  155 
Federal deposit insurance premiums and other regulatory fees 961  671  290 
Loan collection and OREO costs 291  592  (301)
Amortization of intangibles 859  323  536 
Other 3,406  2,802  604 
Total noninterest expense 61,460  45,159  16,301 
Income Before Income Taxes 10,967  18,283  (7,316)
Income tax expense 3,784  6,454  (2,670)
Net Income $7,183  $11,829  $(4,646)
       
Net Income Per Share      
Basic $.20  $.37  $(.17)
Diluted .19  .35  (.16)
Weighted Average Shares Outstanding      
Basic 35,061,492  32,110,454  2,951,038 
Diluted 37,300,987  33,617,054  3,683,933 

 

State Bank Financial Corporation
2Q15 Financial Supplement: Table 6
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
            2Q15 change vs
(Dollars in thousands) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
               
Composition of Loans              
Organic loans (1):              
Construction, land & land development $399,982  $388,148  $310,987  $324,008  $271,525  $11,834  $128,457 
Other commercial real estate 634,943  606,347  609,478  591,672  616,418  28,596  18,525 
Total commercial real estate 1,034,925  994,495  920,465  915,680  887,943  40,430  146,982 
Residential real estate 118,612  107,554  91,448  80,231  75,683  11,058  42,929 
Owner-occupied real estate 205,805  191,557  188,933  164,514  167,129  14,248  38,676 
Commercial, financial & agricultural 126,157  108,929  90,930  102,417  91,552  17,228  34,605 
Leases 26,709  21,491  19,959  19,636    5,218  26,709 
Consumer 12,078  9,442  8,658  9,445  7,997  2,636  4,081 
Total organic loans 1,524,286  1,433,468  1,320,393  1,291,923  1,230,304  90,818  293,982 
Purchased non-credit impaired loans(2):              
Construction, land & land development 61,089  67,129  2,166      (6,040) 61,089 
Other commercial real estate 91,212  94,917  26,793      (3,705) 91,212 
Total commercial real estate 152,301  162,046  28,959      (9,745) 152,301 
Residential real estate 82,668  88,871  43,669      (6,203) 82,668 
Owner-occupied real estate 73,409  77,946  22,743      (4,537) 73,409 
Commercial, financial & agricultural 28,656  42,494  11,635      (13,838) 28,656 
Consumer 3,505  4,517  791      (1,012) 3,505 
Total purchased non-credit impaired loans 340,539  375,874  107,797      (35,335) 340,539 
Purchased credit impaired loans (3):              
Construction, land & land development 20,002  18,791  24,544  25,463  23,851  1,211  (3,849)
Other commercial real estate 48,187  54,211  58,680  54,573  54,212  (6,024) (6,025)
Total commercial real estate 68,189  73,002  83,224  80,036  78,063  (4,813) (9,874)
Residential real estate 70,537  74,876  78,793  80,859  86,371  (4,339) (15,834)
Owner-occupied real estate 35,036  39,210  42,168  48,834  43,409  (4,174) (8,373)
Commercial, financial & agricultural 3,234  3,427  1,953  2,790  3,081  (193) 153 
Consumer 365  332  201  283  378  33  (13)
Total purchased credit impaired loans 177,361  190,847  206,339  212,802  211,302  (13,486) (33,941)
Total loans $2,042,186  $2,000,189  $1,634,529  $1,504,725  $1,441,606  $41,997  $600,580 
Composition of Deposits              
Noninterest-bearing demand deposits $762,100  $691,938  $577,295  $524,634  $461,434  $70,162  $300,666 
Interest-bearing transaction accounts 497,715  562,378  495,966  377,220  387,855  (64,663) 109,860 
Savings and money market deposits 1,038,292  1,052,677  954,626  910,488  898,833  (14,385) 139,459 
Time deposits less than $250,000 301,375  319,043  247,757  234,145  247,648  (17,668) 53,727 
Time deposits $250,000 or greater 59,161  58,151  18,946  20,418  20,975  1,010  38,186 
Brokered and wholesale time deposits 77,642  93,748  97,092  89,069  98,468  (16,106) (20,826)
Total deposits $2,736,285  $2,777,935  $2,391,682  $2,155,974  $2,115,213  $(41,650) $621,072 


(1) Loans originated by State Bank and Trust Company ("State Bank") and First Bank of Georgia ("First Bank").
(2) Consists of loans purchased through the Bank of Atlanta and First Bank acquisitions.
(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.

  

State Bank Financial Corporation
2Q15 Financial Supplement: Table 7
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
            2Q15 change vs
(Dollars in thousands) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
               
Allowance for loan and lease losses on organic loans              
Beginning Balance $19,424  $18,392  $18,828  $17,885  $16,858  $1,032  $2,566 
Charge-offs (64) (76) (1,250) (87) (79) 12  15 
Recoveries 39  38  39  30  106  1  (67)
Net (charge-offs) recoveries (25) (38) (1,211) (57) 27  13  (52)
Provision for loan losses 222  1,070  775  1,000  1,000  (848) (778)
Ending Balance $19,621  $19,424  $18,392  $18,828  $17,885  $197  $1,736 
               
Allowance for loan and lease losses on purchased loans (1) (2)              
Beginning Balance $10,558  $10,246  $8,403  $17,722  $19,182  $312  $(8,624)
Charge-offs (2,201) (3,231) (898) (5,329) (4,881) 1,030  2,680 
Recoveries 1,200  924  2,410  2,417  3,326  276  (2,126)
Net (charge-offs) recoveries (1,001) (2,307) 1,512  (2,912) (1,555) 1,306  554 
Provision for loan losses 391  2,619  331  (6,407) 95  (2,228) 296 
Ending Balance $9,948  $10,558  $10,246  $8,403  $17,722  $(610) $(7,774)
               
Nonperforming organic assets              
Nonaccrual loans $1,317  $1,428  $1,245  $740  $1,063  $(111) $254 
Troubled debt restructurings 3,317  3,374  4,301  875  875  (57) 2,442 
Total nonperforming organic loans 4,634  4,802  5,546  1,615  1,938  (168) 2,696 
Other real estate owned 160    74  410  729  160  (569)
Total nonperforming organic assets $4,794  $4,802  $5,620  $2,025  $2,667  $(8) $2,127 
               
Ratios for organic assets              
Annualized QTD charge-offs (recoveries) to average organic loans .01% .01% .36% .02% (.01)% % .02%
Nonperforming loans to organic loans .30  .33  .42  .13  .16  (.03) .14 
Nonperforming assets to organic loans + OREO .31  .33  .43  .16  .22  (.02) .09 
Past due loans to organic loans .08  .11  .17  .10  .13  (.03) (.05)
Allowance for loan and lease losses to organic loans 1.29  1.36  1.39  1.46  1.45  (.07) (.16)
               
Ratios for purchased non-credit impaired loans              
Annualized QTD charge-offs (recoveries) to average PNCI loans .04% % % N/A  N/A  .04% N/A 
Nonperforming loans to PNCI loans .03  .04  .10  N/A  N/A  (.01) N/A 
Past due loans to PNCI loans .49  .36  .46  N/A  N/A  .13  N/A 
               
Ratios for purchased credit impaired loans (3)              
Annualized QTD charge-offs (recoveries) to average PCI loans 4.81% 6.73% 1.66% 9.82% 8.29% (1.92)% (3.48)%
Past due loans to PCI loans 13.31  18.48  15.62  15.14  11.03  (5.17) 2.28 
Allowance for loan and lease losses to PCI loans 5.61  5.53  4.97  3.95  8.39  .08  (2.78)


(1) Includes purchased non-credit impaired loan charge-offs and corresponding provision for loan losses of $46,000 for 2Q15 and $2,000 for 1Q15, respectively, resulting in no ending allowance for purchased non-credit impaired loans at each period end.
(2) Allowance for loan and lease losses amount attributable to FDIC loss share agreements for purchased credit impaired loans was $(549,000) for 2Q15, $(496,000) for 1Q15, $83,000 for 4Q14, $5.8 million for 3Q14, and $(394,000) for 2Q14.
(3) For each period presented, a portion of the Company's purchased credit impaired loans were contractually past due; however, such delinquencies were included in the Company's 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, purchased credit impaired loans are not considered to be nonperforming assets.

 

State Bank Financial Corporation
2Q15 Financial Supplement: Table 8
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
            2Q15 change vs
(Dollars in thousands) 2Q15 1Q15 4Q14 3Q14 2Q14 1Q15 2Q14
Average Balances              
Interest-bearing deposits in other financial institutions $191,653  $320,248  $450,362  $476,190  $490,009  (128,595) (298,356)
Investment securities 821,998  807,002  603,101  523,488  481,240  14,996  340,758 
Loans, excluding purchased credit  impaired (1) 1,505,558  1,359,300  1,319,586  1,246,008  1,192,494  146,258  313,064 
Purchased credit impaired loans 179,579  194,471  214,518  215,318  236,178  (14,892) (56,599)
Total earning assets 3,113,449  3,113,258  2,698,476  2,461,004  2,399,921  191  713,528 
Total nonearning assets 202,975  210,455  159,733  148,772  191,104  (7,480) 11,871 
Total assets 3,316,424  3,323,713  2,858,209  2,609,776  2,591,025  (7,289) 725,399 
Interest-bearing transaction accounts 522,147  507,087  433,545  376,052  376,143  15,060  146,004 
Savings & money market deposits 1,035,706  1,072,818  958,782  896,503  892,168  (37,112) 143,538 
Time deposits less than $250,000 309,076  327,363  240,509  239,924  252,459  (18,287) 56,617 
Time deposits $250,000 or greater 58,024  56,973  66,009  20,906  21,489  1,051  36,535 
Brokered and wholesale time deposits 82,840  103,464  86,371  96,743  100,395  (20,624) (17,555)
Notes payable 2,767  2,771  2,775  2,778  3,365  (4) (598)
FHLB Advances     326         
Securities sold under agreements to repurchase 8,900  24,971  4,284      (16,071) 8,900 
Total interest-bearing liabilities 2,019,460  2,095,447  1,792,601  1,632,906  1,646,019  (75,987) 373,441 
Noninterest-bearing deposits 739,025  648,379  554,350  495,531  465,941  90,646  273,084 
Other liabilities 32,680  54,619  50,121  32,357  34,890  (21,939) (2,210)
Shareholders’ equity 525,259  525,268  461,137  448,982  444,175  (9) 81,084 
Total liabilities and shareholders' equity 3,316,424  3,323,713  2,858,209  2,609,776  2,591,025  (7,289) 725,399 
               
Interest Margins (2)              
Interest-bearing deposits in other financial institutions .29% .27% .26% .26% .26% .02% .03%
Investment securities, tax-equivalent basis (3) 1.90  1.72  1.73  1.70  1.84  .18  .06 
Loans, excluding purchased credit impaired, tax-equivalent basis (4) 4.84  4.87  4.85  5.17  5.19  (.03) (.35)
Purchased credit impaired loans 18.68  33.51  26.12  38.90  29.02  (14.83) (10.34)
Total earning assets 4.58% 5.37% 5.08% 6.44% 5.86% (.79)% (1.28)%
Interest-bearing transaction accounts .14  .14  .13  .13  .12    .02 
Savings & money market deposits .46  .45  .46  .46  .45  .01  .01 
Time deposits less than $250,000 .32  .30  .43  .54  .57  .02  (.25)
Time deposits $250,000 or greater .57  .55  .75  .78  .80  .02  (.23)
Brokered and wholesale time deposits .97  .94  1.02  1.08  .95  .03  .02 
Notes payable 8.55  7.61  9.01  9.00  10.37  .94  (1.82)
FHLB Advances     1.22         
Securities sold under agreements to repurchase .27  .24  .09      .03  .27 
Total interest-bearing liabilities .39% .38% .43% .45% .45% .01% (.06)%
Net interest spread 4.19% 4.99% 4.65% 5.99% 5.41% (.80)% (1.22)%
Net interest margin 4.33% 5.11% 4.80% 6.14% 5.55% (.78)% (1.22)%

 

(1) Includes average nonaccrual loans of $4.9 million for 2Q15, $5.1 million for 1Q15, $5.6 million for 4Q14, $1.7 million for 3Q14, and $2.0 million for 2Q14.
(2) Interest income or expense annualized for the applicable period.
(3) Reflects taxable equivalent adjustments using the federal statutory tax rate of 35% in adjusting interest on tax-exempt securities to a fully taxable basis. The taxable equivalent adjustments included above amount to $5,000 for 2Q15, $27,000 for 1Q15, $4,000 for 4Q14, $7,000 for 3Q14, and $11,000 for 2Q14.
(4) Reflects taxable equivalent adjustments using the federal statutory tax rate of 35% in adjusting tax-exempt loan interest income to a fully taxable basis. The taxable equivalent adjustments included above amount to $104,000 for 2Q15, $98,000 for 1Q15, $80,000 for 4Q14, $75,000 for 3Q14, and $66,000 for 2Q14.

Media Contact: David Rubinger 404.502.1240 / david.rubinger@statebt.com
Investor Relations Contact: Jeremy Lucas 404.239.8626 / jeremy.lucas@statebt.com

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