Record Earnings of $1.84 Million, or $0.23 per Diluted Share Reported, in the 3rd Quarter 2017
LAKE HAVASU CITY, Arizona, October 30, 2017 – State Bank Corp. (OTCPink:SBAZ) (“Company”), the holding company for Mohave State Bank (“Bank”), today announced net income increased 24.5% to $1.84 million, or $0.23 per diluted share, for the third quarter ended September 30, 2017, compared to $1.48 million, or $0.18 per diluted share, in the second quarter of 2017, and increased 54.8% compared to $1.19 million, or $0.16 per diluted share, for the third quarter of 2016.  

For the nine months of 2017, net income grew 66.0% to $4.75 million, or $0.59 per diluted share, compared to $2.86 million, or $0.45 per diluted share, for the same period of 2016.  

“We produced record financial results during the third quarter, with strong revenue growth, robust mortgage production, 5% annualized loan growth and an improving net interest margin,” stated Brian M. Riley, President and Chief Executive Officer.  “Our focus on gathering core deposits, growing the loan portfolio and expanding our customer base throughout Arizona continues to gain momentum.  Our performance metrics continue to improve with a return on average assets of 1.20%, a return on average equity of 12.71% and an improved efficiency ratio of 59.57%, for the third quarter of 2017.  This solid financial performance is a reflection of the hard work of our employees and their commitment to our customers.”

Third Quarter 2017 Financial Highlights:
• Reported record earnings of $1.84 million, or $0.23 per diluted share
• Mortgage originations totaled 129 loans, funding $29.4 million and generating an operating profit of $243,000.  
• Return on average assets, excluding merger related expenses, was 1.23%.
• Return on average equity, excluding merger related expenses, was 13.06%.
• Core deposits represent nearly 89% of total deposits.
• Total 2017 loan and deposit growth was $22 million and $45 million, respectively.

Net interest margin was 3.99% in the third quarter 2017 compared to 3.84% in the preceding quarter and 4.14 % in the third quarter a year ago.  

The provision for loan losses was $50,000 during the third quarter of 2017, with net credit losses of $19,000.  The allowance for loan losses totaled $3.0 million at September 30, 2017, or 0.87% of total loans.  Excluding acquired loans, the reserve ratio was 1.06%, 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 $632.1 million at September 30, 2017, an increase of $28.7 million, or 4.8%, from $603.4 million at June 30, 2017, and an increase of $32.0 million, or 5.3%, compared to $600.1 million a year ago.  Total loans held for investment were $345.2 million as compared to $335.5 million at June 30, 2017, and $329.2 million at September 30, 2016.  

Total deposits were $561.1 million at quarter-end, an increase of $27.1 million, or 5.1%, from $534.0 million at June 30, 2017, and an increase of $28.3 million, or 5.3%, compared to $532.8 million a year ago.  Core deposits, defined as noninterest bearing demand, money market, NOW and savings accounts, increased 8.6% compared to September 30, 2016.  Core deposits now comprise 88.5% of total deposits.  
Non-performing assets were $3.0 million at September 30, 2017, a 19.0% decrease from $3.8 million at June 30, 2017 and a 54.7% decrease compared to $6.7 million at September 30, 2016.  Nonperforming assets represented 0.48% of total assets at September 30, 2017, which represents its lowest level since fourth quarter 2007.  

Shareholder equity increased to $58.2 million at September 30, 2017, from $54.5 million a year ago.  At September 30, 2017, tangible book value per share was $6.31 per share compared to $5.79 per share a year ago.