State Bank Corp. Earns $1.35 Million in Fourth Quarter 2019 and $7.82 Million for the Year
LAKE HAVASU CITY, Ariz., Jan. 27, 2020 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCPink:SBAZ) (“Company”), the holding company for State Bank of Arizona (“Bank”), today reported that net income decreased by 40.8% to $1.35 million, or $0.17 per diluted share, for the fourth quarter ended December 31, 2019, as compared to $2.28 million, or $.28 per diluted share, for the fourth quarter of 2018. In the preceding quarter, the Company reported earnings of $2.39 million, or $0.29 per diluted share. The decrease was primarily due to $873,000 in costs associated with the pending acquisition of the Bank by Glacier Bancorp incurred in the fourth quarter of 2019. There were no acquisition costs during the preceding quarter or the fourth quarter a year ago.
For the year ended December 31, 2019, net income decreased by 8.9% to $7.82 million, or $0.96 per diluted share, compared to $8.58 million, or $1.06 per diluted share, for 2018.
On September 30, 2019, the Company entered into an agreement to merge with the Glacier Bancorp family of banks. State Bank of Arizona, and its affiliated bank divisions, are expected to be under the Glacier Bancorp umbrella on or around February 29, 2020. The acquisition will see State Bank of Arizona merge into Glacier’s current Arizona bank franchise, Foothills Bank.
“We finished the year with solid net interest income generation, and steady loan and deposit growth,” stated Brian M. Riley, President and Chief Executive Officer. “We look forward to the opportunity for our customers to join Glacier, which has a strong tradition of providing excellent bank resources and quality customer service in both commercial and regional areas throughout the state of Arizona.”
Fourth Quarter 2019 Financial Highlights:
- Fourth quarter net income of $1.35 million, or $0.17 per diluted share, which included $837,000 of acquisition related expenses.
- Loans held for investment grew $33.2 million during the quarter, compared to three months earlier.
- Return on average assets was 0.80%.
- Return on average equity was 7.37%.
- Nonperforming assets were 0.31% of total assets.
- Tangible book value increased 16.5% to $8.27 per share from $7.10 per share a year earlier.
Net interest margin was 3.82% in the fourth quarter 2019, compared to 3.78% in the preceding quarter, and 3.90% in the fourth quarter a year ago. Average cost of funds decreased to 49 basis points, as the Company lowered its overall deposit rates.
The provision for loan losses was $315,000 during the fourth quarter of 2019, with net charge-offs of $58,000. The allowance for loan losses totaled $4.8 million at December 31, 2019, or 1.09% of total loans. Excluding acquired loans, the reserve ratio was 1.15%. On the acquired portfolio, the credit component of the loan purchase discount remains greater than an imputed reserve.
Total assets were $677.7 million at December 31, 2019, an increase of $22.4 million, or 3.4%, from $655.3 million at December 31, 2018. Total loans held for investment were $430.4 million as compared to $407.3 million at December 31, 2018, reflecting an increase of 5.67%.
Total deposits were $586.7 million at year-end, an increase of $28.9 million, or 5.18%, from $557.8 million at December 31, 2018. Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased to $498.4 million at December 31, 2019 from $497.7 million at December 31, 2018. Core deposits now comprise 85.0% of total deposits.
Nonperforming assets were $2.1 million at December 31, 2019, an increase from $1.7 million at December 31, 2018. Nonperforming assets represented 0.31% of total assets at December 31, 2019.
Shareholder equity increased to $73.6 million at December 31, 2019, from $64.4 million at December 31, 2018. At December 31, 2019, tangible book value per share was $8.27 per share compared to $7.10 per share at December 31, 2018.
Capital Management
The Company’s consolidated capital ratios and the Bank’s capital ratios continue to exceed the regulatory guidelines for a well-capitalized financial institution. At December 31, 2019, the Bank reported the following capital ratios:
| Common Equity Tier 1 Capital Ratio | 14.00% | |
| Tier 1 Leverage Ratio | 10.81% | |
| Tier 1 Capital Ratio | 14.00% | |
| Total Capital Ratio | 14.94% |
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 Company is traded over-the-counter as (“SBAZ”). For further information, please visit the web site: www.statebankaz.com
In June 2019, State Bank Corp. was ranked #69 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts with Assets Under $2 Billion list for 2019 based on three-year average return on equity (“ROE”) as of 12/31/18.
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 |
Year to Date | |||||||||||||||
| Dollars in thousands - Unaudited |
12/31/2019 |
9/30/2019 |
12/31/2018 |
12/31/2019 | 12/31/2018 | |||||||||||
| Statements of Operations | ||||||||||||||||
| Interest income | ||||||||||||||||
| Loans, including fees | $ | 5,891 | $ | 5,806 | $ | 5,612 | $ | 23,528 | $ | 21,251 | ||||||
| Securities | 832 | 884 | 891 | 3,387 | 3,588 | |||||||||||
| Fed funds and other | 176 | 271 | 100 | 850 | 446 | |||||||||||
| Total interest income | 6,899 | 6,961 | 6,603 | 27,765 | 25,285 | |||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 623 | 730 | 338 | 2,686 | 1,033 | |||||||||||
| Borrowings | 115 | 121 | 205 | 641 | 611 | |||||||||||
| Total interest expense | 738 | 851 | 543 | 3,327 | 1,644 | |||||||||||
| Net interest income | 6,161 | 6,110 | 6,060 | 24,438 | 23,641 | |||||||||||
| Provision for loan losses | 315 | - | 137 | 665 | 490 | |||||||||||
| Net interest income after loan loss provision | 5,846 | 6,110 | 5,923 | 23,773 | 23,151 | |||||||||||
| Noninterest income | ||||||||||||||||
| Service charges on deposits | 184 | 181 | 190 | 711 | 648 | |||||||||||
| Mortgage loan fees | 396 | 335 | 394 | 1,293 | 1,225 | |||||||||||
| Gain on sale of loans | 946 | 691 | 360 | 2,510 | 1,744 | |||||||||||
| Other income | 407 | 371 | 618 | 1,659 | 2,069 | |||||||||||
| Total noninterest income | 1,933 | 1,578 | 1,562 | 6,173 | 5,686 | |||||||||||
| Noninterest expense | ||||||||||||||||
| Salaries and employee benefits | 3,233 | 2,910 | 2,892 | 11,868 | 10,907 | |||||||||||
| Net occupancy expense | 201 | 207 | 195 | 787 | 783 | |||||||||||
| Equipment expense | 51 | 59 | 91 | 248 | 348 | |||||||||||
| Data processing | 457 | 485 | 525 | 1,988 | 1,871 | |||||||||||
| Director fees & expenses | 102 | 54 | 133 | 317 | 355 | |||||||||||
| Insurance | 106 | 35 | 36 | 212 | 136 | |||||||||||
| Marketing & promotion | 109 | 203 | 82 | 574 | 570 | |||||||||||
| Professional fees | 341 | 247 | 98 | 841 | 726 | |||||||||||
| Office expense | 27 | 32 | 62 | 131 | 141 | |||||||||||
| Regulatory assessments | 11 | 9 | 53 | 132 | 228 | |||||||||||
| OREO and repossessed assets | (19 | ) | 12 | (95 | ) | 117 | (53 | ) | ||||||||
| Other expenses | 442 | 491 | 672 | 1,880 | 1,962 | |||||||||||
| 5,061 | 4,744 | 4,744 | 19,095 | 17,974 | ||||||||||||
| Acquisition related costs | 873 | - | - | 873 | - | |||||||||||
| Total noninterest expense | 5,934 | 4,744 | 4,744 | 19,968 | 17,974 | |||||||||||
| Income (loss) before provision (benefit) for income taxes | 1,845 | 2,944 | 2,741 | 9,978 | 10,863 | |||||||||||
| Provision (benefit) for income taxes | 491 | 554 | 458 | 2,157 | 2,282 | |||||||||||
| Net Income (Loss) | $ | 1,354 | $ | 2,390 | $ | 2,283 | $ | 7,821 | $ | 8,581 | ||||||
| Per Share Data | ||||||||||||||||
| Basic EPS | $ | 0.17 | $ | 0.30 | $ | 0.28 | $ | 0.97 | $ | 1.06 | ||||||
| Diluted EPS | $ | 0.17 | $ | 0.29 | $ | 0.28 | $ | 0.96 | $ | 1.06 | ||||||
| Average shares outstanding | ||||||||||||||||
| Basic | 8,093,299 | 8,093,299 | 8,065,709 | 8,088,153 | 8,060,929 | |||||||||||
| Effect of dilutive shares | 21,467 | 21,524 | 26,581 | 25,218 | 30,352 | |||||||||||
| Diluted | 8,114,766 | 8,114,823 | 8,092,290 | 8,113,371 | 8,091,281 | |||||||||||
| State Bank Corp. | |||||||||
| Balance Sheets | |||||||||
| Dollars in thousands - Unaudited | 12/31/2019 | 9/30/2019 | 12/31/2018 | ||||||
| Consolidated Balance Sheets | |||||||||
| Assets | |||||||||
| Cash and cash equivalents | $ | 3,391 | $ | 4,042 | $ | 4,061 | |||
| Interest bearing deposits | 7,431 | 6,793 | 4,106 | ||||||
| Overnight Funds | 37,300 | 46,030 | 17,960 | ||||||
| Available for sale securities | 151,968 | 168,470 | 179,589 | ||||||
| Total cash and securities | 200,090 | 225,335 | 205,716 | ||||||
| Loans held for sale, before reserves | 8,841 | 15,497 | 2,375 | ||||||
| Gross loans held for investment | 430,396 | 397,187 | 407,264 | ||||||
| Loan loss reserve | (4,801 | ) | (4,546 | ) | (3,824 | ) | |||
| Total net loans | 434,436 | 408,138 | 405,815 | ||||||
| Premises and equipment, net | 14,719 | 14,912 | 14,315 | ||||||
| Other real estate owned | 307 | 307 | 266 | ||||||
| Federal Home Loan Bank and other stock | 5,985 | 6,051 | 6,249 | ||||||
| Company owned life insurance | 11,554 | 11,489 | 11,802 | ||||||
| Other assets | 10,563 | 10,680 | 11,174 | ||||||
| Total Assets | $ | 677,654 | $ | 676,912 | $ | 655,337 | |||
| Liabilities | |||||||||
| Non interest bearing demand | $ | 133,299 | $ | 136,287 | $ | 135,485 | |||
| Money market, NOW and savings | 365,118 | 358,733 | 362,202 | ||||||
| Time deposits <$250K | 64,347 | 67,717 | 51,845 | ||||||
| Time deposits >$250K | 23,924 | 24,079 | 8,299 | ||||||
| Total Deposits | 586,688 | 586,816 | 557,831 | ||||||
| Securities sold under repurchase agreements | 7,450 | 7,136 | 5,001 | ||||||
| Federal Home Loan Bank advances | - | - | 18,000 | ||||||
| Subordinated debt, net of debt issuance costs | 6,572 | 6,690 | 7,045 | ||||||
| Total Debt | 14,022 | 13,826 | 30,046 | ||||||
| Other Liabilities | 3,303 | 3,519 | 3,086 | ||||||
| Total Liabilities | 604,013 | 604,161 | 590,963 | ||||||
| Shareholders' Equity | |||||||||
| Common stock | 39,892 | 39,850 | 39,597 | ||||||
| Accumulated retained earnings | 33,225 | 32,478 | 27,831 | ||||||
| Accumulated other comprehensive income | 524 | 423 | (3,054 | ) | |||||
| Total shareholders equity | 73,641 | 72,751 | 64,374 | ||||||
| Total liabilities and shareholders' equity | $ | 677,654 | $ | 676,912 | $ | 655,337 | |||
| State Bank Corp. | |||||||||||||||
| Five-Quarter Performance Summary | |||||||||||||||
| For the Quarter Ended | |||||||||||||||
| Dollars in thousands - Unaudited | 12/31/2019 | 6/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | ||||||||||
| Performance Highlights | |||||||||||||||
| Earnings: | |||||||||||||||
| Total revenue (Net int. income + nonint. income) | $ | 8,094 | $ | 7,688 | $ | 7,449 | $ | 7,379 | $ | 7,622 | |||||
| Net interest income | $ | 6,161 | $ | 6,110 | $ | 6,071 | $ | 6,095 | $ | 6,060 | |||||
| Provision for loan losses | $ | 315 | $ | - | $ | 50 | $ | 300 | $ | 137 | |||||
| Noninterest income | $ | 1,933 | $ | 1,578 | $ | 1,378 | $ | 1,284 | $ | 1,562 | |||||
| Noninterest expense | $ | 5,934 | $ | 4,744 | $ | 4,524 | $ | 4,766 | $ | 4,744 | |||||
| Net income (loss) | $ | 1,354 | $ | 2,390 | $ | 2,252 | $ | 1,824 | $ | 2,282 | |||||
| Per Share Data: | |||||||||||||||
| Net income (loss), basic | $ | 0.17 | $ | 0.30 | $ | 0.28 | $ | 0.23 | $ | 0.28 | |||||
| Net income (loss), diluted | $ | 0.17 | $ | 0.29 | $ | 0.28 | $ | 0.22 | $ | 0.28 | |||||
| Cash dividends declared | $ | 0.075 | $ | 0.075 | $ | 0.075 | $ | 0.08 | $ | 0.06 | |||||
| Book value | $ | 9.10 | $ | 8.99 | $ | 8.71 | $ | 8.28 | $ | 7.98 | |||||
| Tangible book value | $ | 8.27 | $ | 8.14 | $ | 7.86 | $ | 7.42 | $ | 7.10 | |||||
| Performance Ratios: | |||||||||||||||
| Return on average assets | 0.80% | 1.41% | 1.32% | 1.10% | 1.41% | ||||||||||
| Return on average equity | 7.37% | 13.23% | 13.07% | 11.06% | 14.53% | ||||||||||
| Net interest margin, taxable equivalent | 3.82% | 3.78% | 3.75% | 3.85% | 3.90% | ||||||||||
| Average cost of funds | 0.49% | 0.56% | 0.61% | 0.54% | 0.38% | ||||||||||
| Average yield on loans | 5.55% | 5.63% | 5.68% | 5.70% | 5.61% | ||||||||||
| Efficiency ratio | 73.31% | 61.71% | 60.73% | 64.59% | 62.24% | ||||||||||
| Non-interest income to total revenue | 23.88% | 20.53% | 18.50% | 17.40% | 20.49% | ||||||||||
| Capital & Liquidity: | |||||||||||||||
| Total equity to total assets (EOP) | 10.87% | 10.75% | 10.39% | 9.94% | 9.82% | ||||||||||
| Tangible equity to tangible assets | 9.97% | 9.84% | 9.47% | 9.00% | 8.84% | ||||||||||
| Total loans to total deposits | 74.87% | 70.33% | 69.87% | 71.25% | 73.43% | ||||||||||
| Mohave State Bank | |||||||||||||||
| Common equity tier 1 ratio | 14.00% | 14.44% | 13.91% | 13.49% | 13.18% | ||||||||||
| Tier 1 leverage ratio | 10.81% | 10.66% | 10.40% | 10.39% | 10.42% | ||||||||||
| Tier 1 risk based capital | 14.00% | 14.44% | 13.91% | 13.49% | 13.18% | ||||||||||
| Total risk based capital | 14.94% | 15.37% | 14.83% | 14.32% | 13.94% | ||||||||||
| Asset Quality: | |||||||||||||||
| Gross charge-offs | $ | 70 | $ | 2 | $ | 15 | $ | 88 | $ | - | |||||
| Net charge-offs (NCOs) | $ | 58 | $ | 1 | $ | (356 | ) | $ | (15 | ) | $ | (2 | ) | ||
| NCO to average loans, annualized | 0.05% | 0.00% | -0.34% | -0.01% | 0.00% | ||||||||||
| Non-accrual loans/securities | $ | 1,768 | $ | 2,051 | $ | 2,415 | $ | 1,302 | $ | 1,391 | |||||
| Other real estate owned | $ | 307 | $ | 307 | $ | - | $ | 174 | $ | 266 | |||||
| Repossessed assets | $ | - | $ | - | $ | - | $ | - | $ | - | |||||
| Non-performing assets (NPAs) | $ | 2,075 | $ | 2,358 | $ | 2,415 | $ | 1,476 | $ | 1,657 | |||||
| NPAs to total assets | 0.31% | 0.35% | 0.36% | 0.22% | 0.25% | ||||||||||
| Loans >90 days past due | $ | - | $ | - | $ | - | $ | - | $ | - | |||||
| NPAs + 90 days past due | $ | 2,075 | $ | 2,358 | $ | 2,415 | $ | 1,476 | $ | 1,657 | |||||
| NPAs + loans 90 days past due to total assets | 0.31% | 0.35% | 0.36% | 0.22% | 0.25% | ||||||||||
| Allowance for loan losses to total loans | 1.09% | 1.10% | 1.10% | 0.99% | 0.93% | ||||||||||
| Allowance for loan losses to NPAs | 231.37% | 192.79% | 188.24% | 280.42% | 230.78% | ||||||||||
| Period End Balances: | |||||||||||||||
| Assets | $ | 677,654 | $ | 676,912 | $ | 678,570 | $ | 673,336 | $ | 655,337 | |||||
| Total Loans (before reserves) | $ | 439,237 | $ | 412,684 | $ | 413,636 | $ | 417,333 | $ | 409,639 | |||||
| Deposits | $ | 586,688 | $ | 586,816 | $ | 591,989 | $ | 585,732 | $ | 557,831 | |||||
| Stockholders' equity | $ | 73,641 | $ | 72,751 | $ | 70,514 | $ | 66,919 | $ | 64,374 | |||||
| Common stock market capitalization | $ | 149,726 | $ | 105,213 | $ | 97,120 | $ | 104,646 | $ | 99,208 | |||||
| Full-time equivalent employees | 117 | 120 | 120 | 122 | 124 | ||||||||||
| Shares outstanding | 8,093,299 | 8,093,299 | 8,093,299 | 8,080,791 | 8,065,709 | ||||||||||
| Average Balances: | |||||||||||||||
| Assets | $ | 678,173 | $ | 680,038 | $ | 680,037 | $ | 664,121 | $ | 649,673 | |||||
| Earning assets | $ | 647,793 | $ | 649,501 | $ | 650,744 | $ | 636,755 | $ | 623,584 | |||||
| Total Loans (before reserves) | $ | 424,857 | $ | 412,295 | $ | 415,774 | $ | 415,998 | $ | 400,116 | |||||
| Deposits | $ | 587,653 | $ | 591,694 | $ | 596,079 | $ | 562,399 | $ | 560,343 | |||||
| Other borrowings | $ | 13,681 | $ | 13,422 | $ | 12,457 | $ | 33,995 | $ | 17,649 | |||||
| Stockholders' equity | $ | 73,499 | $ | 72,272 | $ | 68,902 | $ | 65,986 | $ | 62,844 | |||||
| Shares outstanding, basic - wtd | 8,093,299 | 8,093,299 | 8,090,000 | 8,075,764 | 8,065,709 | ||||||||||
| Shares outstanding, diluted - wtd | 8,114,766 | 8,114,823 | 8,115,299 | 8,108,423 | 8,092,290 | ||||||||||
| Contact: | Brian M. Riley, President & CEO | |
| Craig Wenner, EVP & CFO | ||
| 928 855 0000 | ||
| www.mohavestbank.com |
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