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State Bank Corp Reports Second Quarter Results
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| Symbol | Price | Change |
|---|---|---|
| SBAZ.OB | 3.50 | 0.00 |
LAKE HAVASU CITY, Ariz., July 31, 2009 (GLOBE NEWSWIRE) -- State Bank Corp. (OTCBB:SBAZ - News; "Company"), the holding company for Mohave State Bank ("Bank"), announced a net operating loss of $950,000, or $0.25 per diluted share, for the second quarter of 2009 as compared to net income of $1.25 million, or $0.32 per diluted share, for the same period of 2008. The Company's net operating loss for the six months ended June 30, 2009 was $1.99 million, or $0.51 per diluted share, as compared to net income of $2.31 million, or $0.60 per diluted share, for the same period of 2008. The net operating losses incurred in the second quarter and for the six months of 2009 were primarily attributable to provisions for loan losses of $2.9 million and $5.5 million, respectively.
Excluding the impact of loan loss provisions, pre-tax operating income was $1.44 million in the second quarter 2009 as compared to $2.08 million in the same period of 2008. Pre-tax operating income was $2.44 million for the six months ended June 30, 2009 as compared to $3.88 million in the same period of 2008. The decrease in pre-provision, pre-tax operating income in the second quarter and year-to-date decrease is primarily attributable to lower net interest income resulting from an increase in nonperforming assets.
Second quarter 2009 highlights include: * Continued growth in deposits -- The Company experienced a $5.4 million, or 1.9 percent, increase in deposits during the second quarter of 2009. Since December 2008, total deposits have increased $26.2 million, or 9.9 percent. * Reduction in FHLB borrowing -- The Company retired another $8 million, or 32 percent, of its advances from the Federal Home Loan Bank during the past quarter. Since December 2008, the Company has retired $27.1 million, or 61.5 percent of its total FHLB borrowing. * Improvement in primary liquidity measures -- Continued deposit growth and moderation in lending have reduced the Company's loan to deposit ratio to 93.1 percent at June 30, 2009 from a peak of 117.5 percent at September 30, 2008. * Increase in noninterest income -- Noninterest income was $664,000 in the second quarter of 2009, an increase of $115,000, or 20.9 percent, from $549,000 in the same period of 2008. Noninterest income represented 17.0 percent of total revenue in the second quarter 2009 as compared to 12.4 percent of revenue for the same period of 2008. * New Yuma Office opened -- The Company's Yuma Office was relocated to a permanent facility in late June. The office has opened over $3 million in new deposit accounts during the first two weeks of operation.
"The operating strategy to grow core deposit funding and reduce reliance on FHLB borrowing is paying off. We are expecting our new Yuma location to supplement recent deposit growth success. Unfortunately, we continue to experience an increase in the cost of resolving credit challenges within our portfolio, given a severe downturn in real estate values," commented Brian M. Riley, Chief Executive Officer. "Once we move beyond repairing our balance sheet, operating results should return to normal."
The Company provided $2.9 million to its loan loss reserve during the second quarter of 2009 as compared to $195,000 in the same period of 2008. This increase primarily reflects growth in nonperforming assets and challenges within the current credit environment. Real estate conditions in the Company's primary markets continue to show weakness, particularly within the development and commercial real estate sectors. The Company had $1.1 million in net credit losses during the second quarter of 2009 as compared to $72,000 in the same period of 2008. During the six months ended June 30, 2009, the Company provided $5.5 million to its loan loss reserve as compared to $325,000 for the same period of 2008. Net credit losses for the six months ended June 30, 2009 totaled $3.9 million as compared to $160,000 for the same period of 2008.
Total assets were $358.9 million at June 30, 2009, a decrease of $1.9 million, or 0.53 percent, from $360.8 million at December 31, 2008. Total loans decreased by $18.9 million, or 6.6 percent, to $267.0 million at June 30, 2009 from $285.9 million at December 31, 2008. Approximately $12 million of the decrease resulted from loans being transferred to other real estate owned following foreclosure proceedings. The Company is currently limiting growth to preserve regulatory capital levels during this period of unprecedented credit strain.
Nonperforming assets were $29.9 million at June 30, 2009, or 8.3 percent of total assets, as compared to $28.1 million, or 7.7 percent of total assets, at December 31, 2008. The allowance for loan and lease losses totaled $9.0 million, or 3.33 percent of total loans, at June 30, 2009 as compared to $7.4 million, or 2.56 percent of total loans, at December 31, 2008. The Company continues to carefully monitor its level of loss reserves given a continued weak economic environment.
Deposits at June 30, 2009 were $289.5 million, an increase $26.2 million, or 9.9 percent. The Company continues to experience core customer growth and a consumer preference toward the safety of insured bank deposits.
Shareholder equity was $34.1 million at June 30, 2009, down from $36.2 million at December 31, 2008. The Bank must meet certain minimum capital requirements to satisfy federal and state laws. The following table provides the Bank's capital compliance at June 30, 2009:
Ratio to be
adequately Ratio to be well
Actual Ratio capitalized capitalized
Leverage Ratio 9.2% 4.0% 5.0%
Tier 1 Capital
to Risk-Weighted
Assets 10.9% 4.0% 6.0%
Total Capital
to Risk-Weighted
Assets 12.1% 8.0% 10.0%
The Bank exceeds all capital requirements for a "well" capitalized bank. However, the Company has decided to raise an additional $5 million of capital through the issuance of a Capital Note as an abundance of caution. The Company is currently seeking regulatory approval to offer a seven-year, 8% coupon, convertible subordinated note through a private placement offering to accredited investors beginning in August 2009.
"Given weakness within our credit portfolio, the Company is taking all of the steps to ensure that State Bank Corp. emerges from this economic downturn stronger, more agile and poised for even greater success," commented CEO Brian Riley.
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 six full-service branches: two in Lake Havasu City, two in Kingman, one in Bullhead City, and one in Yuma, 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. and its subsidiary Mohave State Bank for which the Company claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the corporation'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, credit quality of borrowers, 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.
State Bank Corp.
Balance Sheets
Dollars in thousands - Unaudited 6/30/2009 12/31/2008
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Consolidated Balance Sheets
Assets
Cash and cash equivalents $ 5,577 $ 4,264
Fed funds sold 365 --
Held for maturity securities 1,876 1,909
Available for sale securities 47,773 47,507
-------- --------
Total cash and securities 55,591 53,680
Loans held for sale, before reserves 2,591 1,329
Gross loans held for investment 267,020 285,949
Loan loss reserve (8,997) (7,374)
-------- --------
Total net loans 260,614 279,904
Premises and equipment, net 11,298 11,348
Deferred taxes 2,750 2,808
Federal Home Loan Bank and other stock 3,158 3,158
Company owned life insurance 5,057 4,961
Other real estate owned 16,936 2,765
Other assets 3,512 2,189
-------- --------
Total Assets $358,916 $360,813
======== ========
Liabilities
Non interest bearing demand $ 40,386 $ 41,553
Money market, NOW and savings 103,081 107,626
Time deposits <$100K 90,091 76,306
Time deposits >$100K 55,909 37,827
-------- --------
Total Deposits 289,467 263,312
-------- --------
Securities sold under repurchase agreements 17,218 15,678
Federal Home Loan Bank advances 17,000 44,100
-------- --------
Total Debt 34,218 59,778
Other Liabilities 1,097 1,495
-------- --------
Total Liabilities 324,782 324,585
Shareholders' Equity
Common stock 21,644 21,527
Accumulated retained earnings 12,128 14,116
Accumulated other comprehensive income 362 585
-------- --------
Total shareholders' equity 34,134 36,228
Total liabilities and shareholders' equity $358,916 $360,813
======== ========
State Bank Corp.
Statements of Operations
For the Quarter Ended Year to Date
Dollars in thousands ---------------------- ----------------------
- Unaudited 6/30/2009 6/30/2008 6/30/2009 6/30/2008
--------------------------------------------- ----------------------
Statements of Operations
Interest income
Loans, including
fees $ 4,207 $ 4,995 $ 8,379 $ 10,088
Securities 482 623 980 1,287
Fed funds and other 4 10 6 21
---------- ---------- ---------- ----------
Total interest
income 4,693 5,628 9,365 11,396
---------- ---------- ---------- ----------
Interest expense
Deposits 1,251 1,457 2,545 3,259
Borrowings 200 274 409 601
---------- ---------- ---------- ----------
Total interest
expense 1,451 1,731 2,954 3,860
---------- ---------- ---------- ----------
Net interest
income 3,242 3,897 6,411 7,536
---------- ---------- ---------- ----------
Provision for
loan losses 2,900 195 5,500 325
---------- ---------- ---------- ----------
Net interest
income after loan
loss provision 342 3,702 911 7,211
---------- ---------- ---------- ----------
Noninterest income
Service charges
on deposits 168 167 350 337
Mortgage loan fees 17 21 30 81
Gain on sale of loans 296 263 521 404
Other income 183 98 269 197
---------- ---------- ---------- ----------
Total noninterest
income 664 549 1,170 1,019
---------- ---------- ---------- ----------
Noninterest expense
Salaries and employee
benefits 1,172 1,250 2,528 2,569
Net occupancy expense 72 123 156 220
Equipment expense 66 75 127 154
Data processing 310 391 629 717
Director fees
& expenses 68 107 139 235
Insurance 22 14 44 28
Marketing & promotion 85 133 187 258
Professional fees 96 58 134 90
Office expense 58 70 118 145
Regulatory
assessments 238 45 364 85
OREO and repossessed
assets 176 -- 500 --
Other expenses 105 97 214 177
---------- ---------- ---------- ----------
Total noninterest
expense 2,468 2,363 5,140 4,678
---------- ---------- ---------- ----------
Income (loss)
before income
taxes (1,462) 1,888 (3,059) 3,552
---------- ---------- ---------- ----------
Provision (benefit)
for income taxes (512) 643 (1,071) 1,243
---------- ---------- ---------- ----------
Net Income (Loss) $ (950) $ 1,245 $ (1,988) $ 2,309
========== ========== ========== ==========
Per Share Data
Basic EPS $ (0.25) $ 0.32 $ (0.52) $ 0.60
Diluted EPS $ (0.25) $ 0.32 $ (0.51) $ 0.60
Average shares
outstanding
Basic 3,851,567 3,842,544 3,848,703 3,837,298
Effect of dilutive
shares 4,239 14,096 13,713 14,657
---------- ---------- ---------- ----------
Diluted 3,855,806 3,856,640 3,862,416 3,851,955
---------- ---------- ---------- ----------
Contact:
State Bank Corp.
Brian M. Riley, Chief Executive Officer
Brad D. Payne, President
(928) 855-0000
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