LAKE HAVASU CITY, Ariz., Jan. 26, 2017 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCQB:SBAZ) (“Company”), the holding company for Mohave State Bank (“Bank”), today reported net income of  $911,000, or $0.11 per diluted share, for the fourth quarter ended December 31, 2016, as compared to $946,000, or $0.16 per diluted share, for the fourth quarter of 2015.  On a linked quarter basis, net income in the fourth quarter 2016 dropped 23.4% from $1.19 million, or $0.16 per diluted share, in the third quarter of 2016.  This decrease was due to higher merger related costs as well as a full quarter of combined operating expenses. 

For the year ended December 31, 2016, net income grew to $3.78 million, or $0.56 per diluted share, as compared to net income of $3.47 million, or $0.59 per diluted share, for 2015. 

“For the fourth quarter, we generated strong operating results driven by balance sheet expansion, core deposit growth and robust mortgage banking operations,” stated Brian M. Riley, President and Chief Executive Officer.  “We are confident that our recently completed merger of Country Bank will provide opportunities for continued revenue growth going forward.  The staff of the combined bank has done an amazing job integrating the two companies and with a majority of the transaction expenses behind us, we look forward to realizing the full value of our merger.”

Fourth Quarter & Full Year 2016 Financial Highlights:

• Fourth Quarter net income, excluding merger related expenses, was $1.23 million, or $0.15 per diluted share.
• Fourth quarter return on average assets, excluding merger related expenses, of 0.83%.
• Fourth quarter return on average equity, excluding merger related expenses, of 9.15%.
• Continued integration of the combined Banks following the acquisition of Country Bank.  The lone outstanding item is the core processing conversion, scheduled for February 2017.
• The Bank’s Mortgage Division originated a record $72.0 million in loan production and recorded net operating profit of $665,000 in 2016.  For the first time, mortgage activities generated over $2 million in gross revenue.

Net interest margin was 3.85% in the fourth quarter 2016 compared to 4.14% in the preceding quarter and 4.29% in the fourth quarter a year ago.  The decrease is the result of a nonrecurring accounting adjustment to loan interest and the normalization of discount amortization on Country Bank’s acquired portfolio.

There was no provision for loan losses in the fourth quarter, with net recoveries of $11,000.  The allowance for loan losses totaled $3.1 million at December 31, 2016, or 0.93% of total loans.  Excluding acquired loans, the reserve ratio was 1.28%, well in line with industry peers.  On the acquired portfolio, the credit component of the loan purchase discount remains greater than the imputed reserve.

Total assets were $583.2 million at December 31, 2016, an increase of $257.9 million, or 79.3%, from $325.3 million at December 31, 2015.  Total loans held for investment were $323.2 million as compared to $216.4 million at December 31, 2015.  Total loan comparisons were affected by the addition of $107.0 million in loans from the acquisition of Country Bank.

Total deposits were $516.5 million, an increase of $233.7 million, or 82.6%, from $282.8 million at December 31, 2015.  Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased to $443.0 million at December 31, 2016, or 97.9%, from $223.8 million at December 31, 2015.  Total deposits and core deposit comparisons were affected by the acquisition of Country Bank by $202.2 million and $186.6 million, respectively.  Core deposits now comprise 85.8% of total deposits. 

Nonperforming assets were $6.1 million at December 31, 2016, a 4.7% decrease from $6.4 million at December 31, 2015.  Nonperforming assets represented 1.05% of total assets at December 31, 2016. 

Shareholder equity increased to $53.8 million at December 31, 2016, from $37.8 million at December 31, 2015.  The significant increase is the result of issuing 2,187,546 shares of common stock at $6.50 per share to finance the acquisition of Country Bank.  At December 31, 2016, tangible book value per share was $5.76 per share compared to $6.47 per share at December 31, 2015.  The decrease was the result of the issuance of common stock and the formation of goodwill and intangible assets involved in the acquisition of Country Bank.

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 December 31, 2016.  The Bank reported the following capital ratios at December 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 nine full-service branches: two in Lake Havasu City, two in Kingman, two in Prescott, one in Bullhead City, one in Prescott Valley, and one in Cottonwood, 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 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

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.