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State Bank Corp. Earnings Increase 13.4% to $772,000, or $0.13 per Share, in 2Q15 From 1Q15; Highlighted by Continued Strong Loan and Core Deposit Growth

20:00 EDT 23 Jul 2015 | Globe Newswire

LAKE HAVASU CITY, Ariz., July 24, 2015 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCQB:SBAZ) ("Company"), the holding company for Mohave State Bank ("Bank"), today announced net income increased 13.4% to $772,000, or $0.13 per diluted share, for the second quarter ended June 30, 2015, compared to $681,000, or $0.12 per diluted share, in the first quarter of 2015. Net income was $3,798,000, or $0.65 per diluted share, for the second quarter of 2014, which included a $3.24 million tax benefit as a result of the reversal of its deferred tax asset valuation allowance. Second quarter 2015 pretax income increased 112.4% to $1.19 million, compared to $558,000 in the second quarter a year ago.

For the six months ended June 30, 2015, net income totaled $1.45 million, or $0.25 per diluted share, compared to $4.27 million, or $0.73 per diluted share, for the same period of 2014. Pretax income increased 115.9% to $2.22 million in the first six months of 2014 compared to $1.03 million in the first six months of 2014.

"During the second quarter we generated excellent operating results. We are successfully growing our franchise, expanding the balance sheet and improving the bottom line," stated Brian M. Riley, President and Chief Executive Officer. "As the regional economic recovery continues to build, we are seeing increasing demand for loans from customers throughout our markets. We believe that our franchise is starting to generate forward momentum and we are encouraged by the outlook for our business in the next few years."

Second Quarter 2015 Financial Highlights:

  • Pre-tax income increased 112.4% to $1.19 million in the second quarter, compared to $558,000 in the second quarter 2014. After tax comparisons were affected by a one-time income tax benefit that was recorded in the prior year.
  • The net interest margin remained healthy at 4.22%.
  • The mortgage department originated 93 loans totaling $18.1 million, resulting in quarterly operating profit of $240,000.
  • Loans held for investment increased 9.76% to $235.9 million during the second quarter compared to three months earlier.
  • Non-performing assets decreased by $3.6 million to $10.4 million at June 30, 2015 on the sale of three properties and continued resolution of problem credits.
  • Tangible book value per share increased 5.9% to $6.13 per share, compared to $5.79 a year ago.

"Our solid second quarter net interest margin was a result of our improved earning asset mix, modestly higher yields on cash and securities and reduced cost of deposits, which generally offset the continuing downward pressure on loan yields," added Riley. Net interest margin was 4.22% in the second quarter 2015 compared to 4.09% in the preceding quarter and 4.18% in the second quarter a year ago.

The provision for loan losses totaled $350,000 in the second quarter against net credit losses of $415,000. The allowance for loan losses totaled $3.0 million at June 30, 2015, or 1.26% of loans held for investment. The increase in net credit losses resulted from a charge-off of a credit relationship that was previously provided for in the Bank's impairment process.

Total assets were $339.1 million at June 30, 2015, an increase of $21.9 million, or 6.9% from $317.2 million at December 31, 2014 and an increase of $37.2 million, or 12.3%, compared to $301.9 million a year ago. Total loans held for investment were $235.9 million as compared to $209.0 million at December 31, 2014 and $202.1 million at June 30, 2014. Total deposits were $297.9 million, an increase of $20.4 million, or 7.4%, from $277.5 million at December 31, 2014 and an increase of $35.6 million, or 13.6%, compared to $262.3 million a year ago. Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased 3.6% compared to three months earlier and increased 16.3% compared to a year earlier to $234.1 million at June 30, 2015. Core deposits now comprise 78.6% of total deposits.   

Nonperforming assets were $10.4 million at June 30, 2015, a 29.7% decrease compared to $14.8 million at December 31, 2014 and a 41.6% decrease compared to $17.8 million at June 30, 2014. Nonperforming assets represented 3.08% of total assets at June 30, 2015, down from 4.67% at December 31, 2014 and 5.91% a year ago.

Shareholder equity increased to $36.0 million at June 30, 2015, from $35.1 million at December 31, 2014 and $34.0 million a year earlier. At June 30, 2015 tangible book value per share improved to $6.13 per share compared to $5.99 per share at December 31, 2014 and $5.79 a year earlier.

Recent Developments

The sale of the Bank's Yuma branch facility to 1st Bank Yuma received all regulatory approval and is expected to close on September 4, 2015.

Capital Management

Community banking organizations, including State Bank Corp. and Mohave State Bank, became subject to new capital requirements on January 1, 2015, and certain provisions of the new rules will be phased in from 2015 through 2019. The Company's consolidated capital ratios and the Bank's capital ratios exceeded the regulatory guidelines for a well-capitalized financial institution under the Basel III and Dodd Frank Wall Street Reform requirements at June 30, 2015.  The Bank reported the following capital ratios at June 30, 2015:

Common Equity Tier 1 Capital Ratio 12.71%
Tier 1 Leverage Ratio 10.72%
Tier 1 Capital Ratio 12.71%
Total Capital Ratio 13.77%

About the Company

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

Forward-looking Statements

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

UNAUDITED FINANCIAL STATEMENTS FOLLOW

State Bank Corp.
Statement of Operations
           
   For the Quarter Ended   Year to Date 
Dollars in thousands - Unaudited 6/30/2015 3/31/2015 6/30/2014 6/30/2015 6/30/2014
Statements of Operations          
Interest income          
Loans, including fees  $ 3,031  $ 2,783  $ 2,641  $ 5,813  $ 5,376
Securities  224  213  210  437  398
Fed funds and other  17  15  13  33  27
Total interest income  3,272  3,011  2,864  6,283  5,801
           
Interest expense          
Deposits  143  133  130  276  272
Borrowings  11  14  14  25  28
Total interest expense  154  147  144  301  300
           
Net interest income  3,118  2,864  2,720  5,982  5,501
           
Provision for loan losses  350  110  250  460  370
Net interest income after loan loss provision  2,768  2,754  2,470  5,522  5,131
           
Noninterest income          
Service charges on deposits  88  96  105  184  209
Mortgage loan fees  304  193  90  497  168
Gain on sale of loans  405  654  155  1,059  323
(Loss)/Gain on securities  --  (8)  --  (8)  (42)
Other income  208  166  216  374  405
Total noninterest income  1,005  1,101  566  2,106  1,063
           
Noninterest expense          
Salaries and employee benefits  1,457  1,525  1,299  2,985  2,607
Net occupancy expense  96  80  93  175  186
Equipment expense  43  42  39  84  76
Data processing  292  288  253  580  521
Director fees & expenses  63  48  55  111  100
Insurance  26  26  30  52  60
Marketing & promotion  81  126  59  207  168
Professional fees  80  91  108  171  303
Office expense  30  35  24  65  51
Regulatory assessments  100  114  107  214  261
OREO and repossessed assets  111  286  249  397  540
Other expenses  209  160  162  368  293
Total noninterest expense  2,588  2,821  2,478  5,409  5,166
           
Income (loss) before provision (benefit) for income taxes  1,185  1,034  558  2,219  1,028
           
Provision (benefit) for income taxes  413  353  (3,240)  766  (3,240)
Net Income (Loss)  $ 772  $ 681  $ 3,798  $ 1,453  $ 4,268
           
           
 Per Share Data           
 Basic EPS   $ 0.13  $ 0.12  $ 0.65  $ 0.25  $ 0.73
 Diluted EPS   $ 0.13  $ 0.12  $ 0.65  $ 0.25  $ 0.73
           
 Average shares outstanding           
 Basic   5,868,038  5,868,038  5,868,038  5,868,038  5,868,038
 Effect of dilutive shares   --  --  --  --  --
 Diluted   5,868,038  5,868,038  5,868,038  5,868,038  5,868,038
           
           
State Bank Corp.
Balance Sheets
       
Dollars in thousands - Unaudited 6/30/2015 12/31/2014 6/30/2014
Consolidated Balance Sheets      
       
Assets      
Cash and cash equivalents  $ 2,169  $ 1,679  $ 2,381
Interest bearing deposits  3,710  3,459  3,665
Overnight Funds  13,930  31,740  20,875
Held for maturity securities  23  27  32
Available for sale securities  50,809  39,814  38,406
Total cash and securities  70,641  76,719  65,359
       
Loans held for sale, before reserves  5,785  1,300  2,201
Gross loans held for investment  235,881  209,012  202,099
Loan loss reserve  (2,969)  (2,954)  (2,924)
Total net loans  238,697  207,358  201,376
       
Premises and equipment, net  9,830  9,892  9,962
Other real estate owned  6,696  9,307  11,693
Federal Home Loan Bank and other stock  2,126  1,917  1,317
Company owned life insurance  5,952  5,871  5,789
Other assets  5,167  6,151  6,381
       
Total Assets  $ 339,109  $ 317,215  $ 301,877
       
       
Liabilities      
Non interest bearing demand  $ 69,170  $ 62,612  $ 57,126
Money market, NOW and savings  164,910  152,308  144,137
Time deposits <$100K  27,691  25,929  29,821
Time deposits >$100K  36,157  36,644  31,191
Total Deposits  297,928  277,493  262,275
       
Securities sold under repurchase agreements  4,169  2,734  4,039
Federal Home Loan Bank advances  --  --  --
Subordinated debt  --  675  675
Total Debt  4,169  3,409  4,714
       
Other Liabilities  1,061  1,176  927
Total Liabilities  303,158  282,078  267,916
       
       
Shareholders' Equity      
Common stock  25,037  25,037  25,037
Accumulated retained earnings  10,908  9,866  8,737
Accumulated other comprehensive income  6  234  187
Total shareholders equity  35,951  35,137  33,961
       
Total liabilities and shareholders' equity  $ 339,109  $ 317,215  $ 301,877
       
       
State Bank Corp.
Five-Quarter Performance Summary
           
   For the Quarter Ended 
Dollars in thousands - Unaudited 6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
Performance Highlights          
           
Earnings:          
Total revenue (Net int. income + nonint. income)  $ 4,123  $ 3,965  $ 3,740  $ 3,668  $ 3,286
Net interest income  $ 3,118  $ 2,864  $ 2,837  $ 2,793  $ 2,720
Provision for loan losses  $ 350  $ 110  $ 75  $ 250  $ 250
Noninterest income  $ 1,005  $ 1,101  $ 903  $ 875  $ 566
Noninterest expense  $ 2,588  $ 2,821  $ 3,068  $ 2,471  $ 2,478
Net income (loss)  $ 772  $ 681  $ 517  $ 612  $ 3,798
           
Per Share Data:          
Net income (loss), basic  $ 0.13  $ 0.12  $ 0.09  $ 0.10  $ 0.65
Net income (loss), diluted  $ 0.13  $ 0.12  $ 0.09  $ 0.10  $ 0.65
Cash dividends declared  $ --  $ 0.07  $ --  $ --  $ --
Book value  $ 6.13  $ 6.04  $ 5.99  $ 5.89  $ 5.79
Tangible book value  $ 6.13  $ 6.04  $ 5.99  $ 5.89  $ 5.79
           
Performance Ratios:          
Return on average assets 0.93% 0.85% 0.65% 0.79% 5.16%
Return on average equity 8.59% 7.68% 5.91% 7.12% 48.09%
Net interest margin, taxable equivalent 4.22% 4.09% 4.07% 4.15% 4.18%
Average cost of funds 0.21% 0.21% 0.22% 0.22% 0.22%
Average yield on loans 5.30% 5.18% 5.33% 5.31% 5.18%
Efficiency ratio 62.77% 71.15% 82.03% 67.37% 75.41%
Non-interest income to total revenue 24.38% 27.77% 24.14% 23.85% 17.22%
           
Capital & Liquidity:          
Total equity to total assets (EOP) 10.60% 10.80% 11.08% 10.88% 11.25%
Tangible equity to tangible assets 10.60% 10.80% 11.08% 10.88% 11.25%
Total loans to total deposits 78.83% 74.50% 75.01% 73.44% 77.36%
Mohave State Bank          
Common equity tier 1 ratio 12.71% 13.36%      
Tier 1 leverage ratio 10.72% 10.92% 10.39% 10.34% 10.72%
Tier 1 risk based capital 12.71% 13.36% 13.70% 13.49% 13.23%
Total risk based capital 13.77% 14.52% 14.93% 14.75% 14.47%
           
Asset Quality:          
Gross charge-offs  $ 449  $ 124  $ 351  $ --  $ 1,045
Net charge-offs (NCOs)  $ 415  $ 30  $ 313  $ (19)  $ 1,025
NCO to average loans, annualized 0.73% 0.06% 0.60% -0.04% 2.01%
Non-accrual loans/securities  $ 3,732  $ 6,444  $ 5,522  $ 5,975  $ 6,147
Other real estate owned  $ 6,696  $ 7,595  $ 9,307  $ 11,268  $ 11,693
Repossessed assets  $ --  $ --  $ --  $ --  $ --
Non-performing assets (NPAs)  $ 10,428  $ 14,039  $ 14,829  $ 17,243  $ 17,840
NPAs to total assets 3.08% 4.28% 4.67% 5.43% 5.91%
Loans >90 days past due  $ --  $ --  $ --  $ --  $ --
NPAs + 90 days past due  $ 10,428  $ 14,039  $ 14,829  $ 17,243  $ 17,840
NPAs + loans 90 days past due to total assets 3.08% 4.28% 4.67% 5.43% 5.91%
Allowance for loan losses to total loans 1.26% 1.42% 1.42% 1.57% 1.44%
Allowance for loan losses to NPAs 28.47% 21.61% 19.92% 18.52% 16.39%
           
Period End Balances:          
Assets  $ 339,109  $ 328,302  $ 317,215  $ 317,648  $ 301,877
Total Loans (before reserves)  $ 234,854  $ 213,990  $ 208,152  $ 203,209  $ 202,897
Deposits  $ 297,928  $ 287,237  $ 277,493  $ 276,716  $ 262,275
Stockholders' equity  $ 35,951  $ 35,470  $ 35,137  $ 34,575  $ 33,961
Common stock market capitalization  $ 27,873  $ 29,575  $ 29,340  $ 27,991  $ 30,396
Full-time equivalent employees  81  81  80  80  76
Shares outstanding  5,868,038  5,868,038  5,868,038  5,868,038  5,868,038
           
Average Balances:          
Assets  $ 333,387  $ 319,817  $ 318,835  $ 309,367  $ 294,282
Earning assets  $ 301,427  $ 285,722  $ 283,657  $ 273,449  $ 260,383
Total Loans (before reserves)  $ 228,847  $ 214,992  $ 207,130  $ 205,025  $ 203,858
Deposits  $ 291,980  $ 279,305  $ 277,947  $ 269,083  $ 257,282
Other borrowings  $ 4,817  $ 4,481  $ 4,481  $ 4,737  $ 4,547
Stockholders' equity  $ 35,947  $ 35,454  $ 34,975  $ 34,365  $ 31,592
Shares outstanding, basic - wtd  5,868,038  5,868,038  5,868,038  5,868,038  5,868,038
Shares outstanding, diluted - wtd  5,868,038  5,868,038  5,868,038  5,868,038  5,868,038
           
CONTACT: Brian M. Riley, President & CEO
         Craig Wenner, EVP & CFO
         928 855 0000
         www.mohavestbank.com

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