LAKE HAVASU CITY, Ariz., April 29, 2016 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCQB:SBAZ) (“Company”), the holding company for Mohave State Bank (“Bank”), today announced net income increased 2.8% to $700,000, or $0.12 per diluted share, for the first quarter ended March 31, 2016, as compared to net income of $681,000, or $0.12 per diluted share, for the first quarter of 2015.  Excluding costs related to its pending merger, net income for the quarter would have been $816,000, a 19.8% increase compared to the first quarter one year ago. (See “Non-GAAP Financial Information” table)

“The highlight of the first quarter was the announcement of our definitive merger agreement with Country Bank,” stated Brian M. Riley, President and Chief Executive Officer. “We are excited about this opportunity to bring together two independent community banks with similar philosophies and cultures into a combined Arizona franchise exceeding $500 million in assets.  This merger reaffirms our position as the largest community bank headquartered in Arizona and expands our geographic footprint into Yavapai County with Country Bank’s branches in Prescott, Prescott Valley and Cottonwood.  With strong capital, improving asset quality and continued profitability, we are investing in our infrastructure to capitalize on opportunities in our market.”

In February, State Bank announced it had signed a definitive merger agreement whereby Country Bank will merge into Mohave State Bank in a transaction valued at approximately $29.6 million.  The transaction joins two of the leading community bank franchises headquartered in Arizona with approximately $530 million in combined assets.  “We expect the merger will be immediately accretive to earnings per share and significantly increase return on equity,” said Riley.

First Quarter 2016 Highlights:

• First quarter core operating (non-GAAP) net income increased 19.8% to $816,000, or $0.14 per diluted share, compared to $681,000, or $0.12 per diluted share, in the first quarter a year ago.
• Declared an annual cash dividend of $0.10 per share, which represented a dividend yield of 1.40%.
• The net interest margin remained healthy at 4.08%.
• Tangible book value increased 7.9% to $6.52 per share from $6.04 per share a year earlier.

There was no provision for loan losses in the first quarter reflecting a small net recovery of $9,000.  The allowance for loan losses totaled $3.1 million at March 31, 2016, or 1.40% of total loans.  “We continue to carefully monitor our level of loss reserves and as asset quality continues to improve our need to make additions to reserves has diminished in the past few quarters,” noted Riley.

Total assets were $338.2 million at March 31, 2016, an increase of $12.9 million, or 4.0% from $325.3 million at December 31, 2015 and an increase of $9.9 million, or 3.0%, compared to $328.3 million a year ago.  Total loans held for investment were $216.5 million as compared to $216.3 million at December 31, 2015 and $214.9 million at March 31, 2015.  Total deposits were $288.6 million, an increase of $5.8 million, or 2.1%, from $282.8 million at December 31, 2015 and an increase of $1.4 million, or 0.5%, compared to $287.2 million a year ago.  Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased 2.9% compared to three months earlier and increased 1.9% compared to a year earlier to $230.2 million at March 31, 2016.  Core deposits now comprise 79.8% of total deposits.   

Nonperforming assets were $6.2 million at March 31, 2016, a 3.2% decrease compared to $6.4 million at December 31, 2015 and a 55.7% decrease compared to $14.0 million at March 31, 2015.  Nonperforming assets represented 1.84% of total assets at March 31, 2016, down from 1.97% at December 31, 2015 and 4.28% a year ago.

Shareholder equity increased to $38.1 million at March 31, 2015, from $37.8 million at December 31, 2015 and $35.5 million a year earlier.  At March 31, 2016 tangible book value per share improved to $6.52 per share compared to $6.47 per share three months earlier and $6.04 a year earlier.

Recent Developments

State Bank Corp. announced it signed a definitive merger agreement with Country Bank, whereby Country Bank will merge into Mohave State Bank in a stock and cash transaction valued at approximately $29.6 million.  Country Bank has four branches with $205.5 million in assets as of December 31, 2015, and following the combination of the two franchises, State Bank Corp. will have nine branches in attractive Arizona markets with assets of $530 million.  Additionally, on January 22^nd the Company declared a $0.10 per share annual cash dividend, an increase of 43% from the previous year. 

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 March 31, 2016.  The Bank reported the following capital ratios at March 31, 2016:

Use of Non-GAAP Financial Information

This press release contains both financial measures based on accounting principles generally accepted in the United States (“GAAP”) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding the Company’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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 five full-service branches: two in Lake Havasu City, two in Kingman, and one in Bullhead City, 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., Mohave State Bank, Country Bank and the proposed merger.  These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: the expected cost savings, synergies and other financial benefits from the merger might not be realized within the expected time frames or at all; regulatory approvals of the merger may not be obtained or adverse regulatory conditions may be imposed in connection with such regulatory approvals; and conditions to the closing of the merger may not be satisfied. Annualized, pro forma, projected and estimated numbers in this press release are used for illustrative purposes only, are not forecasts and may not reflect actual results. All forward-looking statements included in this press release are based on information available at the time of the release, and State Bank Corp., Mohave State Bank and Country Bank assume no obligation to update any forward-looking statements.

UNAUDITED FINANCIAL STATEMENTS FOLLOW

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