LAKE HAVASU CITY, Ariz., April 26, 2019 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCPINK:SBAZ)(“Company”), the holding company for State Bank of Arizona (“Bank”), today announced net income of $1.82 million, or $0.22 per diluted share, for the first quarter ended March 31, 2019, as compared to net income of $1.85 million, or $0.23 per diluted share, for the first quarter of 2018.  In the preceding quarter, the Company reported earnings of $2.28 million, or $0.28 per diluted share. 

“Our first quarter financial results were highlighted by strong loan and core deposit growth and solid net interest income,” stated Brian M. Riley, President and Chief Executive Officer.  “Another highlight of the quarter was the opening of our first full service branch in Phoenix, following the success of our loan production office opened there in May 2018.  The continued focus on delivering value to our clients combined with the strength of the economy in the Arizona markets we serve continues to sustain and build our community banking franchise.” 

First Quarter 2019 Financial Highlights:

• Net income was $1.82 million, or $0.22 per diluted share.

• Opens full service branch in Phoenix, Arizona.

• Return on average assets of 1.02%.

• Return on average equity of 11.06%.

• Core deposits comprised 86.7% of total deposits.

• Tangible book value increased 17.0% to $7.42 per share from $6.34 per share a year earlier.

Net interest margin was 3.95% in the first quarter 2019 compared to 4.01% in the preceding quarter and 3.78% in the first quarter a year ago.  Average cost of funds rose to 54 basis points, as the Company increased overall deposit rates to remain competitive in the market place.

The provision for loan losses was $300,000 during the first quarter of 2019, with net recoveries of $15,000.  The allowance for loan losses totaled $4.1 million at March 31, 2019, or 0.99% of total loans.  Excluding acquired loans, the reserve ratio was 1.08%, which is in line with industry peers.  On the acquired portfolio, the credit component of the loan purchase discount remains greater than an imputed reserve.

Total assets were $673.3 million at March 31, 2019, an increase of $18.0 million, or 2.75%, from $655.3 million at December 31, 2018 and an increase of $42.9 million, or 6.81%, compared to $630.4 million a year ago.  Total loans held for investment were $411.2 million as compared to $407.3 million at December 31, 2018 and $358.8 million at March 31, 2018. 

Total deposits were $585.7 million, an increase of $27.9 million, or 5.00%, from $557.8 million at December 31, 2018 and an increase of $27.3 million, or 4.89%, compared to $558.4 million a year ago.  Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased 2.03% compared to three months earlier and increased 1.76% compared to a year earlier to $507.8 million at March 31, 2019.  Core deposits now comprise 86.7% of total deposits. 

Nonperforming assets were $1.5 million at March 31, 2019, an 11.76% decrease from $1.7 million at December 31, 2018.  Nonperforming assets represented 0.22% of total assets at March 31, 2019. 

Shareholder equity increased to $66.9 million at March 31, 2019, from $64.4 million at December 31, 2018.  At March 31, 2019, tangible book value per share was $7.42 per share compared to $7.10 per share at December 31, 2018.

Capital Management
State Bank Corp., and State Bank of Arizona, have consolidated capital ratios and Bank capital ratios that exceed the regulatory guidelines for a well-capitalized financial institution under the Basel III and Dodd Frank Wall Street Reform requirements.  The Bank reported the following capital ratios at March 31, 2019:

Common Equity Tier 1 Capital Ratio	13.49%
Tier 1 Leverage Ratio	10.39%
Tier 1 Capital Ratio	13.49%
Total Capital Ratio	14.32%

About the Company
State Bank Corp., headquartered in Lake Havasu City, Arizona, is the parent company of State Bank of Arizona, the largest locally-owned bank in Arizona.  State Bank of Arizona 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.  Specializing in providing exceptional customer service and investing in its local communities, State Bank of Arizona was named 2018 Bank of the Year by Western Independent Bankers.  The Bank has ten full-service branches: two in Lake Havasu City, two in Kingman, two in Prescott, one in Bullhead City, one in Prescott Valley, one in Phoenix, and one in Cottonwood, Arizona.  The Bank also operates a loan production office in Sedona, AZ.  The Company is traded over-the-counter as SBAZ. For further information, please visit the website: www.statebankaz.com

Forward-looking Statements
This press release may include forward-looking statements about State Bank Corp. and State Bank of Arizona.  These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. 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
Dollars in thousands - Unaudited		3/31/2019			12/31/2018			3/31/2018
Statements of Operations
	Interest income
	Loans, including fees	$	5,926		$	5,612		$	4,842
	Securities		809			891			897
	Fed funds and other		166			100			90
	Total interest income		6,901			6,603			5,829
	Interest expense
	Deposits		544			338			206
	Borrowings		262			205			105
	Total interest expense		806			543			311
	Net interest income		6,095			6,060			5,518
	Provision for loan losses		300			137			35
	Net interest income after loan loss provision		5,795			5,923			5,483
	Noninterest income
	Service charges on deposits		178			190			148
	Mortgage loan fees		233			394			247
	Gain on sale of loans		390			360			442
	Other income		483			618			548
	Total noninterest income		1,284			1,562			1,385
	Noninterest expense
	Salaries and employee benefits		2,919			2,892			2,695
	Net occupancy expense		192			195			183
	Equipment expense		71			91			92
	Data processing		532			525			440
	Director fees & expenses		76			133			80
	Insurance		35			36			39
	Marketing & promotion		160			82			129
	Professional fees		81			98			149
	Office expense		81			62			38
	Regulatory assessments		56			53			64
	OREO and repossessed assets		82			(95	)		42
	Other expenses		481			672			502
	Total noninterest expense		4,766			4,744			4,453
	Income (loss) before provision (benefit) for income taxes		2,313			2,741			2,415
	Provision (benefit) for income taxes		489			458			566
	Net Income (Loss)	$	1,824		$	2,283		$	1,849
Per Share Data
	Basic EPS	$	0.23		$	0.28		$	0.23
	Diluted EPS	$	0.22		$	0.28		$	0.23
	Average shares outstanding
	Basic		8,075,764			8,065,709			8,049,845
	Effect of dilutive shares		32,659			26,581			37,679
	Diluted		8,108,423			8,092,290			8,087,524

State Bank Corp.
Balance Sheets
Dollars in thousands - Unaudited		3/31/2019			12/31/2018			3/31/2018
Consolidated Balance Sheets
Assets
	Cash and cash equivalents	$	4,319		$	4,061		$	4,419
	Interest bearing deposits		8,376			4,106			6,658
	Overnight Funds		34,030			17,960			21,055
	Available for sale securities		170,374			179,589			199,932
	Total cash and securities		217,099			205,716			232,064
	Loans held for sale, before reserves		6,174			2,375			2,624
	Gross loans held for investment		411,159			407,264			358,811
	Loan loss reserve		(4,139	)		(3,824	)		(3,356	)
	Total net loans		413,194			405,815			358,079
	Premises and equipment, net		15,171			14,315			14,152
	Other real estate owned		174			266			528
	Federal Home Loan Bank and other stock		6,183			6,249			3,867
	Company owned life insurance		11,360			11,802			11,607
	Other assets		10,155			11,174			10,063
	Total Assets	$	673,336		$	655,337		$	630,360
Liabilities
	Non interest bearing demand	$	136,761		$	135,485		$	126,307
	Money market, NOW and savings		371,021			362,202			372,706
	Time deposits <$250K		60,417			51,845			54,811
	Time deposits >$250K		17,533			8,299			4,590
	Total Deposits		585,732			557,831			558,414
	Securities sold under repurchase agreements		5,176			5,001			4,339
	Federal Home Loan Bank advances		6,000			18,000			-
	Subordinated debt, net of debt issuance costs		6,953			7,045			7,367
	Total Debt		18,129			30,046			11,706
	Other Liabilities		2,556			3,086			1,859
	Total Liabilities		606,417			590,963			571,979
Shareholders' Equity
	Common stock		3,976			39,597			39,466
	Accumulated retained earnings		64,835			27,831			22,551
	Accumulated other comprehensive income		(1,892	)		(3,054	)		(3,636	)
	Total shareholders equity		66,919			64,374			58,381
	Total liabilities and shareholders' equity	$	673,336		$	655,337		$	630,360

State Bank Corp.
Five-Quarter Performance Summary
		For the Quarter Ended
Dollars in thousands - Unaudited		3/31/2019			12/31/2018			9/30/2018			6/30/2018			3/31/2018
Performance Highlights
Earnings:
	Total revenue (Net int. income + nonint. income)	$	7,379		$	7,622		$	7,542		$	7,259		$	6,903
	Net interest income	$	6,095		$	6,060		$	6,190		$	5,873		$	5,518
	Provision for loan losses	$	300		$	137		$	160		$	158		$	35
	Noninterest income	$	1,284		$	1,562		$	1,352		$	1,386		$	1,385
	Noninterest expense	$	4,766		$	4,744		$	4,473		$	4,303		$	4,453
	Net income (loss)	$	1,824		$	2,283		$	2,312		$	2,137		$	1,849
Per Share Data:
	Net income (loss), basic	$	0.23		$	0.28		$	0.29		$	0.27		$	0.23
	Net income (loss), diluted	$	0.22		$	0.28		$	0.29		$	0.26		$	0.23
	Cash dividends declared	$	0.075		$	0.06		$	0.06		$	0.06		$	0.06
	Book value	$	8.28		$	7.98		$	7.56		$	7.40		$	7.25
	Tangible book value	$	7.42		$	7.10		$	6.67		$	6.50		$	6.34
Performance Ratios:
	Return on average assets		1.02	%		1.41	%		1.44	%		1.33	%		1.18	%
	Return on average equity		11.06	%		14.53	%		15.19	%		14.48	%		12.64	%
	Net interest margin, taxable equivalent		3.95	%		4.01	%		4.12	%		3.93	%		3.78	%
	Average cost of funds		0.54	%		0.38	%		0.29	%		0.29	%		0.22	%
	Average yield on loans		5.70	%		5.61	%		5.87	%		5.68	%		5.44	%
	Efficiency ratio		64.59	%		62.24	%		59.31	%		59.28	%		64.51	%
	Non-interest income to total revenue		17.40	%		20.49	%		17.93	%		19.09	%		20.06	%
Capital & Liquidity:
	Total equity to total assets (EOP)		9.94	%		9.82	%		9.48	%		9.30	%		9.26	%
	Tangible equity to tangible assets		9.00	%		8.84	%		8.47	%		8.26	%		8.20	%
	Total loans to total deposits		71.25	%		73.43	%		68.72	%		65.34	%		64.73	%
	State Bank of Arizona
	Common equity tier 1 ratio		13.49	%		13.18	%		13.49	%		13.83	%		13.98	%
	Tier 1 leverage ratio		10.39	%		10.42	%		10.23	%		9.99	%		9.91	%
	Tier 1 risk based capital		13.49	%		13.18	%		13.49	%		13.83	%		13.98	%
	Total risk based capital		14.32	%		13.94	%		14.26	%		14.63	%		14.75	%
Asset Quality:
	Gross charge-offs	$	88		$	-		$	77		$	-		$	-
	Net charge-offs (NCOs)	$	(15	)	$	(2	)	$	71		$	(82	)	$	(15	)
	NCO to average loans, annualized		-0.01	%		0.00	%		0.08	%		-0.14	%		-0.02	%
	Non-accrual loans/securities	$	1,302		$	1,391		$	657		$	2,389		$	5,899
	Other real estate owned	$	174		$	266		$	266		$	399		$	529
	Repossessed assets	$	-		$	-		$	-		$	-		$	-
	Non-performing assets (NPAs)	$	1,476		$	1,657		$	923		$	2,788		$	6,428
	NPAs to total assets		0.22	%		0.25	%		0.14	%		0.43	%		1.02	%
	Loans >90 days past due	$	-		$	-		$	-		$	-		$	-
	NPAs + 90 days past due	$	1,476		$	1,657		$	923		$	2,788		$	6,428
	NPAs + loans 90 days past due to total assets		0.22	%		0.25	%		0.14	%		0.43	%		1.02	%
	Allowance for loan losses to total loans		0.99	%		0.93	%		0.97	%		0.99	%		0.93	%
	Allowance for loan losses to NPAs		280.42	%		230.78	%		404.77	%		134.00	%		52.21	%
Period End Balances:
	Assets	$	673,336		$	655,337		$	642,963		$	641,682		$	630,360
	Total Loans (before reserves)	$	417,333		$	409,639		$	385,489		$	367,125		$	361,435
	Deposits	$	585,732		$	557,831		$	560,952		$	561,902		$	558,414
	Stockholders' equity	$	66,919		$	64,374		$	60,975		$	59,664		$	58,381
	Common stock market capitalization	$	104,646		$	99,208		$	117,759		$	126,632		$	97,023
	Full-time equivalent employees		122			124			121			122			117
	Shares outstanding		8,080,791			8,065,709			8,065,709			8,065,709			8,051,677
Average Balances:
	Assets	$	715,225		$	649,673		$	644,250		$	640,327		$	627,504
	Earning assets	$	620,445		$	607,149		$	603,271		$	599,968		$	585,574
	Total Loans (before reserves)	$	415,998		$	400,116		$	377,752		$	369,705		$	355,848
	Deposits	$	562,399		$	560,343		$	562,683		$	562,942		$	556,608
	Other borrowings	$	33,995		$	17,649		$	17,596		$	16,622		$	11,028
	Stockholders' equity	$	65,986		$	62,844		$	60,901		$	59,034		$	58,519
	Shares outstanding, basic - wtd		8,075,764			8,065,709			8,065,709			8,062,225			8,049,845
	Shares outstanding, diluted - wtd		8,108,423			8,092,290			8,092,983			8,093,024			8,087,524

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