State Bank Financial Corp. Reports Q2 2017 Financial Results

7/27/17

State Bank Financial Corporation (NASDAQ: STBZ) today announced unaudited financial results for the second quarter ended June 30, 2017. Net income for the second quarter of 2017 was $15.2 million, compared to $11.6 million in the first quarter of 2017 and $14.0 million in the second quarter of 2016. Fully diluted earnings per share were $.39 in the second quarter of 2017 compared to $.30 in the first quarter of 2017 and $.38 in the second quarter of 2016. 

Joe Evans, Chairman of State Bank Financial, commented, “We had a great second quarter. These results reflect the fully integrated impact of our acquisitions of The National Bank of Georgia and S Bank and our continued performance improvement on all fronts. Our all-cash acquisition of AloStar Bank, which was announced during the quarter, will be yet another meaningful enhancement to our earnings trajectory.”

Operating Highlights

Interest income on loans improved to $34.9 million in the second quarter of 2017, an $812,000 increase from the first quarter of 2017 and a $9.5 million increase from the second quarter of 2016. Net interest income of $46.5 million in the second quarter of 2017 increased from $44.0 million in the first quarter of 2017 and $41.7 million in the second quarter of 2016. Accretion income on loans was $9.2 million in the second quarter of 2017, up from $7.7 million in the first quarter of 2017 but down from $14.0 million in the second quarter of 2016, which was positively impacted by loan pool closings. As of June 30, 2017, approximately $60 million of accretable discount remains to be recognized as loan accretion income. 

Noninterest income, led by a strong quarter in SBA and mortgage banking, was $10.5 million in the second quarter of 2017, compared to $9.5 million in the first quarter of 2017 and $10.2 million in the second quarter of 2016. SBA income increased $805,000 from the previous quarter to $2.0 million, while mortgage banking income increased $202,000 to $3.1 million.

Total noninterest expense declined 7% in the second quarter of 2017 to $32.0 million, compared to $34.6 million in the first quarter of 2017 and $30.7 million in the second quarter of 2016. The $2.6 million linked-quarter decrease was due to improvements in nearly every expense category as the recent mergers are now fully integrated and cost savings are realized.

Financial Condition

Total assets at June 30, 2017, were $4.23 billion, up from $4.20 billion at March 31, 2017. Total loans were $2.9 billion at June 30, 2017, up $26.2 million from the first quarter of 2017. Period-end organic and purchased non-credit impaired loans increased to $2.7 billion at March 31, 2017, a net increase of $44.8 million from the first quarter of 2017. Purchased credit impaired loans decreased to $135.6 million at the end of the second quarter of 2017, an $18.6 million linked-quarter decline. 

Tom Wiley, Vice Chairman and CEO, commented, “I’m very pleased with the quarter’s financial results, demonstrating strong revenue growth coupled with expense discipline. I’m even more pleased with the fundamental drivers of these results: the successful integration of two banks in the first half of the year and the team’s continued execution on our customer-centric strategic priorities. These core competencies cause me to be excited about the future of our franchise.” 

The organic loan portfolio continued to perform well in the second quarter of 2017 as past due organic loans represented .09% of total organic loans. The provision for loan losses on organic loans was $1.1 million in the second quarter of 2017 and was primarily attributable to organic loan growth in the quarter. The allowance as a percent of loans was .99% at the end of the second quarter of 2017. 

Total deposits at June 30, 2017, were $3.45 billion, up $42.9 million from $3.41 billion at March 31, 2017. Period-end transaction accounts, comprised of noninterest-bearing demand deposits and interestbearing transaction accounts, increased $55.9 million from the first quarter of 2017. Noninterest-bearing demand deposits represented 29.2% of total deposits as of June 30, 2017. 

Tangible book value per share was $13.94 at the end of the second quarter of 2017. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 13.23% and a Tier I risk-based capital ratio of 14.98%.

Detailed Results

Supplemental tables displaying financial results for the second quarter of 2017, the previous four quarters, and the first half of 2017 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. For more information on these non-GAAP financial measures, please refer to 2Q17 Financial Supplement: Table 8, Reconciliation of Non-GAAP Measures.

About State Bank Financial Corporation

State Bank Financial Corporation (NASDAQ: STBZ), with approximately $4.2 billion in assets as of June 30, 2017, is an Atlanta-based bank holding company for State Bank and Trust Company. State Bank operates 31 full-service banking offices and seven mortgage origination offices in seven of Georgia’s eight largest MSAs.

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

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