Form 8-K STATE BANK FINANCIAL For: Oct 22

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October 22, 2015 7:33 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): October 22, 2015
 
State Bank Financial Corporation
(Exact name of registrant as specified in its charter)
 
Georgia
(State or other jurisdiction of incorporation)
 
001-35139
 
27-1744232
(Commission File Number)
 
(IRS Employer Identification No.)
 
3399 Peachtree Road, NE, Suite 1900
 
 
Atlanta, Georgia
 
30326
(Address of principal executive offices)
 
(Zip Code)
 
(404) 475-6599
(Registrant’s telephone number, including area code)
 

(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




INFORMATION TO BE INCLUDED IN THE REPORT
 
Item 2.02.  Results of Operations and Financial Condition
 
On October 22, 2015, State Bank Financial Corporation, the holding company for State Bank and Trust Company ("the Bank"), issued a press release announcing its unaudited financial results for the third quarter ended September 30, 2015. A copy of the press release is attached hereto to this Current Report on Form 8-K as Exhibit 99.1.

Item 7.01. Regulation FD Disclosure

A copy of the slide presentation that State Bank Financial Corporation will present during the earnings conference call starting at 11:00 AM eastern time on October 22, 2015 is attached hereto to this Current Report on Form 8-K as Exhibit 99.2. The slide presentation is also available on the company’s website, www.statebt.com, under the “Investors” section.

The information furnished pursuant to Items 2.02 and 7.01, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the company under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01. Other Events

On October 22, 2015, State Bank and Trust Company (the "Bank"), a wholly-owned subsidiary bank of State Bank Financial Corporation, issued a press release announcing the purchase of the equipment finance origination platform of Patriot Capital Corporation. A copy of the press release is attached as Exhibit 99.3 to this Current Report and incorporated herein by reference.

Item 9.01.  Financial Statements and Exhibits
 
(d)           Exhibits

Exhibit No.
 
Exhibit
99.1
 
Earnings Press Release dated October 22, 2015
99.2
 
Slide Presentation dated October 22, 2015
99.3
 
Patriot Capital Press Release dated October 22, 2015




SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
STATE BANK FINANCIAL CORPORATION
 
 
 
 
 
 
Dated: October 22, 2015
By:
/s/ Sheila E. Ray
 
 
Sheila E. Ray
 
 
Chief Financial Officer
 
 
 




         
    

Media Contact: David Rubinger 404.502.1240 / [email protected]
Investor Relations Contact: Jeremy Lucas 404.239.8626 / [email protected]


State Bank Financial Corporation Reports Operating Income of $11.4 Million
for Third Quarter 2015
 
▪
Operating earnings per diluted share of $.31
▪
$98 million of net loan growth, or 19% annualized
▪
Announced organizational realignment as part of broader efficiency initiative in September
▪
Acquisition of equipment finance group subsequent to quarter-end


ATLANTA, GA, October 22, 2015 - State Bank Financial Corporation (NASDAQ: STBZ) today announced operating income of $11.4 million, or $.31 per fully diluted share for the quarter ended September 30, 2015, compared to $7.7 million, or $.21 per fully diluted share for the second quarter of 2015. Interest income on loans improved to $24.2 million, a $1.1 million increase from the second quarter of 2015, and was driven by continued strong loan growth. Additionally, recovery activity, much of which would have previously been shared with the FDIC under the bank’s now terminated loss share agreements, contributed significantly to the improvement in operating income.

Operating income excludes severance and merger-related expenses that are not considered part of ongoing operations. Including those items, net income for the third quarter of 2015 was $9.1 million, compared to a net loss of $2.0 million for the second quarter of 2015. Fully diluted earnings per share were $.25 in the third quarter of 2015 compared to a fully diluted loss per share of $.06 in the second quarter of 2015.

Joe Evans, Chairman and CEO of State Bank Financial, commented, "This was another quarter of solid fundamentals as loans, core deposits, and fee income businesses continue to grow at an impressive pace. Also, recovery income related to previously charged-off loans exceeded expectations. I am pleased with the results of the third quarter, but even more pleased with the outlook."

Acquisition of Patriot Capital

In a separate release today, State Bank and Trust Company announced that it purchased the equipment finance origination platform of Patriot Capital Corporation, a leading provider of equipment financing to the retail petroleum industry. Patriot Capital is a privately owned company with 17 employees that finances equipment throughout the continental United States. Patriot Capital was founded in 2000 and is based in Atlanta, Georgia.

Tom Wiley, President of State Bank Financial, added, "I am very pleased with our strong loan growth this quarter and am excited about the addition of Patriot Capital's production in future periods. We expect our acquisition of Patriot Capital will further diversify and broaden our asset generating capabilities."

1


Operating Highlights

Net interest income of $37.4 million in the third quarter of 2015 increased from $33.5 million in the second quarter of 2015 due to higher interest and accretion income on loans. Interest income on loans, excluding purchased credit impaired loans, for the third quarter of 2015 was $24.2 million, up $1.1 million from $23.1 million in the prior quarter. Accretion income on loans was $11.2 million in the third quarter of 2015, up from $8.4 million in the second quarter of 2015 due primarily to larger gains from early loan payoffs compared to the previous quarter. Base accretion declined $764,000 in the third quarter of 2015 compared to the prior quarter. As of September 30, 2015, approximately $97 million of accretable discount remains to be recognized as loan accretion income, compared to $104 million of accretable discount remaining at the end of the second quarter of 2015. Interest expense of $2.0 million in the third quarter of 2015 was essentially flat compared to the prior quarter. Cost of funds for the third quarter of 2015 was 28 basis points, down one basis point from the second quarter of 2015.

The organic loan portfolio continued to perform well in the third quarter of 2015 as past due organic loans represented only eight basis points of total organic loans. A net provision benefit of $265,000 was recognized in the third quarter of 2015, consisting of an $873,000 benefit to the provision on purchased credit impaired loans due to improving cash flow expectations. This was partially offset by a $614,000 provision expense on organic loans due to loan growth in the quarter.

Noninterest income, excluding amortization of the FDIC receivable for loss share agreements in the second quarter of 2015, was $8.9 million for the third quarter of 2015, down from $9.3 million in the second quarter of 2015. Noninterest income was negatively affected by the hedges on underlying fixed-rate loans, which contributed to a $636,000 linked-quarter decline. In addition, a decline in mortgage banking income was largely offset by increases in SBA and payroll fee income.

Total noninterest expense for the third quarter of 2015 was $32.4 million, a $1.1 million increase from
the second quarter of 2015, due almost entirely to higher salary and benefit costs as a result of severance related to the organizational realignment announced in September 2015. Severance expenses totaled $3.0 million in the third quarter of 2015 compared to $443,000 in the second quarter of 2015. Merger-related expenses totaled $717,000 in the third quarter of 2015, down from $876,000 in the second quarter of 2015.

Financial Condition

Total assets at September 30, 2015 were $3.4 billion, up from $3.3 billion at June 30, 2015. Period-end organic and purchased non-credit impaired loans increased to $2.0 billion at September 30, 2015, a net increase of $115.5 million from the second quarter of 2015. Purchased credit impaired loans decreased to $159.3 million at the end of the third quarter of 2015, an $18.0 million linked-quarter decline. Total net loans, excluding loans held for sale, were $2.1 billion at September 30, 2015, up $98.1 million from the second quarter of 2015.

Total deposits at September 30, 2015 were $2.8 billion, up from $2.7 billion at the end of the second quarter of 2015. Period-end noninterest-bearing demand deposits increased $61.0 million from the second quarter of 2015 and represented 29.4% of total deposits as of September 30, 2015. Average noninterest-bearing demand deposits increased $75.0 million from the second quarter of 2015, the 14th consecutive quarterly increase. Period-end and average transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $62.8 million and $39.4 million, respectively, from the second quarter of 2015.

2


Tangible book value per share was $13.78 at the end of the third quarter of 2015. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 15.04% and a Tier I risk-based capital ratio of 18.64%.

Comparison to the Third Quarter of 2014

Net operating income for the quarter ended September 30, 2015 decreased $284,000 compared to the same period in 2014. The decrease in operating income was primarily due to the $10.0 million decrease in accretion income as the third quarter of 2014 benefited from $9.2 million in gains from loan pool closeouts. Net income decreased $2.4 million from the third quarter of 2014 primarily as a result of severance and merger-related charges recognized in the third quarter of 2015. Net interest income declined $513,000 as an $8.1 million increase in interest income on loans was more than offset by the previously mentioned decline in accretion income. Cost of funds for the third quarter of 2015 of 28 basis points was down seven basis points from the third quarter of 2014.

Comparisons to the third quarter of 2014 are materially affected by State Bank's acquisitions of Atlanta Bancorporation, Inc. on October 1, 2014 and Georgia-Carolina Bancshares, Inc. on January 1, 2015.

Noninterest income, excluding amortization of the FDIC receivable, increased $5.3 million in the third quarter of 2015 compared to the third quarter of 2014, primarily as a result of the mortgage banking and SBA lending units acquired in our two acquisitions. Operating expenses were also impacted by the acquisitions and increased $6.5 million during the third quarter of 2015 compared to the third quarter of 2014.

Total loans increased $635.0 million during the year-over-year period as growth in organic loans of $403.0 million and purchased non-credit impaired loans of $285.4 million was partially offset by a $53.5 million decline in purchased credit impaired loans. Total deposits increased $639.2 million for the quarter ended September 30, 2015, compared to the third quarter of 2014, including growth in noninterest-bearing deposits of $298.5 million and interest-bearing transaction accounts of $122.2 million.

Detailed Results

Supplemental tables displaying financial results for the third quarter of 2015, the previous four quarters and year-to-date 2015 are included with this press release.

Non-GAAP Financial Measures

This press release contains certain performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). For more information on these non-GAAP financial measures, please refer to 3Q15 Financial Supplement: Table 8, Condensed Operating Results to GAAP Earnings Reconciliation, on page 13.









3


Conference Call

Chief Executive Officer Joe Evans, President Tom Wiley, Chief Financial Officer Sheila Ray and Chief Credit Officer David Black will discuss financial and business results for the quarter on a conference call today at 11:00 a.m. ET.

Dial in number: 1.800.708.4508

Please allow time to register your name and affiliation/company prior to the start of the call. A replay of the conference call will be available shortly after the call's completion in the Investors section on the company's website at www.statebt.com. A slide presentation for today's call is also available in the Investors section on the company's website.

About State Bank Financial Corporation

State Bank Financial Corporation (NASDAQ: STBZ), with approximately $3.4 billion in assets as of September 30, 2015, is an Atlanta-based bank holding company for State Bank and Trust Company. State Bank operates 26 banking offices in Metro Atlanta, Middle Georgia and Augusta, Georgia, and seven mortgage origination offices.
 
To learn more about State Bank, visit www.statebt.com


Cautionary Note Regarding Forward-Looking Statements

Certain statements on our conference call may be "forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “intend,” “plan,” “seek,” “believe,” “expect,” “strategy,” “future,” “likely,” “project,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, our outlook for future periods and our expectation that our acquisition of Patriot Capital will further diversify and broaden our asset-generating capabilities. Such forward-looking statements are subject to risks, uncertainties, and other factors, such as a downturn in the economy, unanticipated losses related to the integration of, and accounting for, acquired assets and assumed liabilities in our acquisitions, access to funding sources, greater than expected noninterest expenses, volatile credit and financial markets both domestic and foreign, potential deterioration in real estate values, regulatory changes and excessive loan losses, any or all of which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. See Item 1A, Risk Factors, in our Annual Report on Form 10-K for the most recently ended fiscal year, for a description of some of the important factors that may affect actual outcomes.

4


State Bank Financial Corporation
3Q15 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
3Q15 change vs
(Dollars in thousands, except per share  amounts; taxable equivalent)
 
3Q15
 
2Q15
 
1Q15
 
4Q14
 
3Q14
 
2Q15
 
3Q14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Statement Highlights
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income on loans
 
$
24,397

 
$
23,174

 
$
21,498

 
$
17,496

 
$
16,237

 
$
1,223

 
$
8,160

Accretion income on loans
 
11,156

 
8,365

 
16,069

 
14,124

 
21,110

 
2,791

 
(9,954
)
Interest income on invested funds
 
4,054

 
4,037

 
3,629

 
2,932

 
2,552

 
17

 
1,502

Total interest income (1)
 
39,607

 
35,576

 
41,196

 
34,552

 
39,899

 
4,031

 
(292
)
Interest expense
 
1,977

 
1,972

 
1,979

 
1,923

 
1,857

 
5

 
120

Net interest income (1)
 
37,630

 
33,604

 
39,217

 
32,629

 
38,042

 
4,026

 
(412
)
Provision for loan and lease losses
 
(265
)
 
64

 
3,193

 
1,189

 
416

 
(329
)
 
(681
)
Adjusted (amortization) accretion of FDIC receivable for loss share agreements (1) (3)
 
—

 
(492
)
 
(1,448
)
 
1,652

 
(196
)
 
492

 
196

Other noninterest income (1) (4)
 
8,894

 
9,319

 
10,250

 
5,285

 
3,624

 
(425
)
 
5,270

Total operating noninterest income (1) (3)
 
8,894

 
8,827

 
8,802

 
6,937

 
3,428

 
67

 
5,466

Operating noninterest expense (1) (5)
 
28,687

 
30,038

 
29,585

 
23,999

 
22,207

 
(1,351
)
 
6,480

Operating income before taxes (1) (3)(5)
 
18,102

 
12,329

 
15,241

 
14,378

 
18,847

 
5,773

 
(745
)
Operating income tax expense (1) (6)
 
6,696

 
4,620

 
5,729

 
5,689

 
7,157

 
2,076

 
(461
)
Operating income (1) (7)
 
11,406

 
7,709

 
9,512

 
8,689

 
11,690

 
3,697

 
(284
)
Loss share termination, net of tax benefit
 
—

 
(8,921
)
 
—

 
—

 
—

 
8,921

 
—

Severance costs, net of tax benefit
 
(1,847
)
 
(272
)
 
(224
)
 
(916
)
 
(49
)
 
(1,575
)
 
(1,798
)
Merger-related expenses, net of tax benefit
 
(440
)
 
(537
)
 
(84
)
 
(188
)
 
(137
)
 
97

 
(303
)
Net income (loss) available to common shareholders
 
$
9,119

 
$
(2,021
)
 
$
9,204

 
$
7,585

 
$
11,504

 
$
11,140

 
$
(2,385
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Share Data
 
 
 
 
 
 
 
 
 
 
 


 


Basic net income (loss) per share
 
$
.26

 
$
(.06
)
 
$
.27

 
$
.24

 
$
.36

 
$
.32

 
$
(.10
)
Diluted net income (loss) per share
 
.25

 
(.06
)
 
.26

 
.23

 
.35

 
.31

 
(.10
)
Cash dividends declared per share
 
.07

 
.06

 
.05

 
.04

 
.04

 
.01

 
.03

Book value per share
 
14.88

 
14.62

 
14.81

 
14.38

 
14.20

 
.26

 
.68

Tangible book value per share (1)
 
13.78

 
13.51

 
13.70

 
13.97

 
13.83

 
.27

 
(.05
)
Market price per share (quarter end)
 
20.68

 
21.70

 
21.00

 
19.98

 
16.24

 
(1.02
)
 
4.44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Shares Outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock
 
35,753,855

 
35,763,791

 
35,738,850

 
32,269,604

 
32,271,466

 
(9,936
)
 
3,482,389

Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
34,687,354

 
34,654,689

 
33,593,687

 
31,794,828

 
31,723,875

 
32,665

 
2,963,479

Diluted (8)
 
37,068,387

 
34,654,689

 
35,642,302

 
33,462,979

 
33,253,907

 
2,413,698

 
3,814,480

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Balance Sheet Highlights
 
 
 
 
 
 
 
 
 
 
 


 


Loans
 
$
2,136,746

 
$
2,099,798

 
$
1,986,008

 
$
1,645,013

 
$
1,461,326

 
$
36,948

 
$
675,420

Assets
 
3,344,023

 
3,316,424

 
3,323,713

 
2,858,209

 
2,609,776

 
27,599

 
734,247

Deposits
 
2,766,314

 
2,746,818

 
2,716,084

 
2,339,566

 
2,125,659

 
19,496

 
640,655

Liabilities
 
48,211

 
44,347

 
82,361

 
57,506

 
35,135

 
3,864

 
13,076

Equity
 
529,498

 
525,259

 
525,268

 
461,137

 
448,982

 
4,239

 
80,516

Tangible common equity
 
489,757

 
485,337

 
485,087

 
447,641

 
437,038

 
4,420

 
52,719

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 







5


State Bank Financial Corporation
3Q15 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
3Q15 change vs
(Dollars in thousands, except per share  amounts; taxable equivalent)
 
3Q15
 
2Q15
 
1Q15
 
4Q14
 
3Q14
 
2Q15
 
3Q14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Key Metrics (2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating return on average assets (7)
 
1.35
%
 
.93
 %
 
1.16
%
 
1.21
%
 
1.78
%
 
.42
 %
 
(.43
)%
Operating return on average equity (7)
 
8.55

 
5.89

 
7.34

 
7.48

 
10.33

 
2.66

 
(1.78
)
Return on average assets
 
1.08

 
(.24
)
 
1.12

 
1.05

 
1.75

 
1.32

 
(.67
)
Return on average equity
 
6.83

 
(1.54
)
 
7.11

 
6.53

 
10.17

 
8.37

 
(3.34
)
Yield on earning assets
 
4.98

 
4.58

 
5.37

 
5.08

 
6.44

 
.40

 
(1.46
)
Cost of funds
 
.28

 
.29

 
.29

 
.33

 
.35

 
(.01
)
 
(.07
)
Rate on interest-bearing liabilities
 
.40

 
.39

 
.38

 
.43

 
.45

 
.01

 
(.05
)
Net interest margin
 
4.73

 
4.33

 
5.11

 
4.80

 
6.13

 
.40

 
(1.40
)
Net interest margin excluding accretion income (9)
 
3.52

 
3.45

 
3.22

 
2.96

 
2.99

 
.07

 
.53

Average equity to average assets (1)
 
15.83

 
15.84

 
15.80

 
16.13

 
17.20

 
(.01
)
 
(1.37
)
Leverage ratio
 
15.04

 
14.92

 
15.00

 
15.90

 
17.16

 
.12

 
(2.12
)
Tier I risk-based capital ratio
 
18.64

 
19.12

 
19.51

 
23.12

 
25.17

 
(.48
)
 
(6.53
)
Total risk-based capital ratio
 
19.73

 
20.28

 
20.70

 
24.37

 
26.42

 
(.55
)
 
(6.69
)
Operating efficiency ratio (1) (3) (5)
 
61.66

 
70.79

 
61.61

 
60.66

 
53.55

 
—

 
—

Average loans to average deposits
 
77.24

 
76.44

 
73.12

 
70.31

 
68.75

 
.80

 
8.49

Noninterest-bearing deposits to total deposits
 
29.45

 
27.85

 
24.91

 
24.14

 
24.33

 
1.60

 
5.12

 
(1) Non-GAAP financial measure. See Condensed Operating Results to GAAP Earnings Reconciliation (Table 8) for further information.
(2) Income statement ratios and yield/rate information are annualized for the applicable period.
(3) Excludes the one-time loss share expense termination charge of $14.6 million in the second quarter of 2015.
(4) Includes all line items of noninterest income other than (amortization) accretion of FDIC receivable for loss share agreements.
(5) Excludes severance costs and merger-related expenses.
(6) Excludes the taxable equivalent adjustments on interest income and the income tax benefit relating to the one-time loss share expense termination charge, severance costs and merger-related expense.
(7) Excludes the one-time loss share expense termination charge, severance costs and merger-related expense, net of the income tax benefit.
(8) Since the Company had a net loss for the three month period ended June 30, 2015, all potential common shares were excluded from the
calculation of diluted earnings per share as they would have had an anti-dilutive effect for the period.
(9) Excludes accretion income on loans and average purchased credit impaired loans.

6


State Bank Financial Corporation
3Q15 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
3Q15 change vs
(Dollars in thousands)
 
3Q15
 
2Q15
 
1Q15
 
4Q14
 
3Q14
 
2Q15
 
3Q14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and amounts due from depository institutions
 
$
15,734

 
$
21,903

 
$
20,426

 
$
10,550

 
$
17,209

 
$
(6,169
)
 
$
(1,475
)
Interest-bearing deposits in other financial institutions
 
153,937

 
179,831

 
285,971

 
470,608

 
459,271

 
(25,894
)
 
(305,334
)
Cash and cash equivalents
 
169,671

 
201,734

 
306,397

 
481,158

 
476,480

 
(32,063
)
 
(306,809
)
Investment securities available-for-sale
 
831,548

 
815,277

 
819,609

 
640,086

 
532,447

 
16,271

 
299,101

Loans
 
2,139,691

 
2,042,186

 
2,000,189

 
1,634,529

 
1,504,725

 
97,505

 
634,966

Allowance for loan and lease losses (1)
 
(28,930
)
 
(29,569
)
 
(29,982
)
 
(28,638
)
 
(27,231
)
 
639

 
(1,699
)
Loans, net
 
2,110,761

 
2,012,617

 
1,970,207

 
1,605,891

 
1,477,494

 
98,144

 
633,267

Loans held-for-sale
 
59,563

 
64,047

 
45,211

 
3,174

 
1,283

 
(4,484
)
 
58,280

Other real estate owned
 
11,363

 
15,055

 
16,848

 
8,568

 
15,169

 
(3,692
)
 
(3,806
)
Premises and equipment, net
 
43,982

 
45,608

 
46,370

 
35,286

 
34,696

 
(1,626
)
 
9,286

Goodwill
 
31,049

 
31,049

 
30,510

 
10,606

 
10,381

 
—

 
20,668

Other intangibles, net
 
8,486

 
8,922

 
9,045

 
2,752

 
1,511

 
(436
)
 
6,975

SBA servicing rights
 
2,463

 
2,185

 
1,902

 
1,516

 
—

 
278

 
2,463

FDIC receivable for loss share agreements
 
—

 
—

 
17,098

 
22,320

 
26,221

 
—

 
(26,221
)
Bank-owned life insurance
 
58,347

 
57,810

 
57,348

 
41,479

 
41,136

 
537

 
17,211

Other assets
 
61,440

 
46,004

 
31,363

 
29,374

 
30,779

 
15,436

 
30,661

Total assets
 
$
3,388,673

 
$
3,300,308

 
$
3,351,908

 
$
2,882,210

 
$
2,647,597

 
$
88,365

 
$
741,076

Liabilities and Shareholders’ Equity
 
 
 
 
 
 
 
 
 
 
 


 


Noninterest-bearing deposits
 
$
823,146

 
$
762,100

 
$
691,938

 
$
577,295

 
$
524,634

 
$
61,046

 
$
298,512

Interest-bearing deposits
 
1,972,042

 
1,974,185

 
2,085,997

 
1,814,387

 
1,631,340

 
(2,143
)
 
340,702

Total deposits
 
2,795,188

 
2,736,285

 
2,777,935

 
2,391,682

 
2,155,974

 
58,903

 
639,214

Securities sold under agreements to repurchase
 
4,872

 
11,747

 
8,250

 
—

 
—

 
(6,875
)
 
4,872

Notes payable
 
2,761

 
2,765

 
2,769

 
2,771

 
2,776

 
(4
)
 
(15
)
Other liabilities
 
53,691

 
26,527

 
33,708

 
23,662

 
30,570

 
27,164

 
23,121

Total liabilities
 
2,856,512

 
2,777,324

 
2,822,662

 
2,418,115

 
2,189,320

 
79,188

 
667,192

Total shareholders’ equity
 
532,161

 
522,984

 
529,246

 
464,095

 
458,277

 
9,177

 
73,884

Total liabilities and shareholders’ equity
 
$
3,388,673

 
$
3,300,308

 
$
3,351,908

 
$
2,882,210

 
$
2,647,597

 
$
88,365

 
$
741,076

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Ratios (2)
 
 
 
 
 
 
 
 
 
 
 


 


Average equity to average assets
 
15.83
%
 
15.84
%
 
15.80
%
 
16.13
%
 
17.20
%
 
(.01
)%
 
(1.37
)%
Leverage ratio
 
15.04

 
14.92

 
15.00

 
15.90

 
17.16

 
.12

 
(2.12
)
CET1 risk-based capital ratio
 
18.64

 
19.12

 
19.51

 
N/A

 
N/A

 
(.48
)
 
N/A

Tier I risk-based capital ratio
 
18.64

 
19.12

 
19.51

 
23.12

 
25.17

 
(.48
)
 
(6.53
)
Total risk-based capital ratio
 
19.73

 
20.28

 
20.70

 
24.37

 
26.42

 
(.55
)
 
(6.69
)
 
(1) Allowance for loan losses on purchased credit impaired loans was approximately $8.8 million at 3Q15, $10.0 million at 2Q15, $10.6 million at 1Q15, $10.2 million at 4Q14 and $8.4 million at 3Q14.
(2) Beginning January 1, 2015, the Company's ratios are calculated using the Basel III framework. Capital ratios for prior periods were calculated using the Basel I framework. The Common Equity Tier 1 (CET1) capital ratio is a new ratio introduced under the Basel III framework.

7


State Bank Financial Corporation
3Q15 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
3Q15 change vs
(Dollars in thousands, except per share  amounts)
 
3Q15
 
2Q15
 
1Q15
 
4Q14
 
3Q14
 
2Q15
 
3Q14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income on loans
 
$
24,218

 
$
23,070

 
$
21,400

 
$
17,416

 
$
16,162

 
$
1,148

 
$
8,056

Accretion income on loans
 
11,156

 
8,365

 
16,069

 
14,124

 
21,110

 
2,791

 
(9,954
)
Interest income on invested funds
 
4,050

 
4,032

 
3,602

 
2,928

 
2,545

 
18

 
1,505

Interest expense
 
1,977

 
1,972

 
1,979

 
1,923

 
1,857

 
5

 
120

Net interest income
 
37,447

 
33,495

 
39,092

 
32,545

 
37,960

 
3,952

 
(513
)
Provision for loan and lease losses
 
(265
)
 
64

 
3,193

 
1,189

 
416

 
(329
)
 
(681
)
Net interest income after provision for loan and lease losses
 
37,712

 
33,431

 
35,899

 
31,356

 
37,544

 
4,281

 
168

Noninterest Income:
 
 
 
 
 
 
 
 
 
 
 


 


(Amortization) accretion of FDIC receivable for loss share agreements
 
—

 
(15,040
)
 
(1,448
)
 
1,652

 
(196
)
 
15,040

 
196

Service charges on deposits
 
1,491

 
1,501

 
1,489

 
1,274

 
1,206

 
(10
)
 
285

Mortgage banking income
 
3,079

 
3,480

 
2,680

 
322

 
191

 
(401
)
 
2,888

Payroll fee income
 
1,004

 
956

 
1,158

 
1,050

 
875

 
48

 
129

SBA income
 
1,720

 
1,380

 
1,123

 
477

 
—

 
340

 
1,720

ATM income
 
742

 
773

 
725

 
624

 
621

 
(31
)
 
121

Bank-owned life insurance income
 
537

 
462

 
455

 
343

 
333

 
75

 
204

Gain (loss) on sale of investment securities
 
17

 
(59
)
 
380

 
223

 
—

 
76

 
17

Other
 
304

 
826

 
2,240

 
972

 
398

 
(522
)
 
(94
)
Total noninterest income
 
8,894

 
(5,721
)
 
8,802

 
6,937

 
3,428

 
14,615

 
5,466

Noninterest Expense:
 
 
 
 
 
 
 
 
 
 
 


 


Salaries and employee benefits
 
23,293

 
20,506

 
19,582

 
17,797

 
14,644

 
2,787

 
8,649

Occupancy and equipment
 
3,113

 
3,219

 
3,105

 
2,615

 
2,440

 
(106
)
 
673

Data processing
 
2,097

 
2,435

 
2,280

 
1,909

 
1,758

 
(338
)
 
339

Legal and professional fees
 
1,144

 
1,284

 
1,484

 
844

 
851

 
(140
)
 
293

Merger-related expenses
 
717

 
876

 
137

 
306

 
223

 
(159
)
 
494

Marketing
 
491

 
599

 
436

 
491

 
453

 
(108
)
 
38

Federal deposit insurance premiums and other regulatory fees
 
621

 
455

 
506

 
393

 
356

 
166

 
265

Loan collection and OREO costs
 
(1,198
)
 
(114
)
 
405

 
(112
)
 
—

 
(1,084
)
 
(1,198
)
Amortization of intangibles
 
436

 
442

 
417

 
257

 
152

 
(6
)
 
284

Other
 
1,702

 
1,655

 
1,735

 
1,299

 
1,633

 
47

 
69

Total noninterest expense
 
32,416

 
31,357

 
30,087

 
25,799

 
22,510

 
1,059

 
9,906

Income (Loss) Before Income Taxes
 
14,190

 
(3,647
)
 
14,614

 
12,494

 
18,462

 
17,837

 
(4,272
)
Income tax expense (benefit)
 
5,071

 
(1,626
)
 
5,410

 
4,909

 
6,958

 
6,697

 
(1,887
)
Net Income (Loss)
 
$
9,119

 
$
(2,021
)
 
$
9,204

 
$
7,585

 
$
11,504

 
$
11,140

 
$
(2,385
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
.26

 
$
(.06
)
 
$
.27

 
$
.24

 
$
.36

 
$
.32

 
$
(.10
)
Diluted
 
.25

 
(.06
)
 
.26

 
.23

 
.35

 
.31

 
(.10
)
Weighted Average Shares Outstanding
 
 
 
 
 
 
 
 
 
 
 


 


Basic
 
34,687,354

 
34,654,689

 
33,593,687

 
31,794,828

 
31,723,875

 
32,665

 
2,963,479

Diluted
 
37,068,387

 
34,654,689

 
35,642,302

 
33,462,979

 
33,253,907

 
2,413,698

 
3,814,480




8


State Bank Financial Corporation
3Q15 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)
 
 
Nine Months Ended September 30
 
YTD Change
(Dollars in thousands, except per share amounts)
 
2015
 
2014
 
 
 
 
 
 
 
 
Net Interest Income:
 
 
 
 
 
 
Interest income on loans
 
$
68,688

 
$
46,760

 
$
21,928

Accretion income on loans
 
35,590

 
64,733

 
(29,143
)
Interest income on invested funds
 
11,684

 
7,560

 
4,124

Interest expense
 
5,928

 
5,597

 
331

Net interest income
 
110,034

 
113,456

 
(3,422
)
Provision for loan and lease losses
 
2,992

 
1,707

 
1,285

Net interest income after provision for loan and lease losses
 
107,042

 
111,749

 
(4,707
)
Noninterest Income:
 
 
 
 
 

Amortization of FDIC receivable for loss share agreements
 
(16,488
)
 
(17,437
)
 
949

Service charges on deposits
 
4,481

 
3,560

 
921

Mortgage banking income
 
9,239

 
513

 
8,726

Payroll fee income
 
3,118

 
2,650

 
468

SBA income
 
4,223

 
—

 
4,223

ATM income
 
2,240

 
1,847

 
393

Bank-owned life insurance income
 
1,454

 
991

 
463

Gain on sale of investment securities
 
338

 
23

 
315

Other
 
3,370

 
518

 
2,852

Total noninterest income
 
11,975

 
(7,335
)
 
19,310

Noninterest Expense:
 
 
 
 
 

Salaries and employee benefits
 
63,381

 
44,296

 
19,085

Occupancy and equipment
 
9,437

 
7,283

 
2,154

Data processing
 
6,812

 
5,144

 
1,668

Legal and professional fees
 
3,912

 
2,596

 
1,316

Merger-related expenses
 
1,730

 
488

 
1,242

Marketing
 
1,526

 
1,333

 
193

Federal deposit insurance premiums and other regulatory fees
 
1,582

 
1,027

 
555

Loan collection and OREO costs
 
(907
)
 
592

 
(1,499
)
Amortization of intangibles
 
1,295

 
475

 
820

Other
 
5,092

 
4,435

 
657

Total noninterest expense
 
93,860

 
67,669

 
26,191

Income Before Income Taxes
 
25,157

 
36,745

 
(11,588
)
Income tax expense
 
8,855

 
13,412

 
(4,557
)
Net Income
 
$
16,302

 
$
23,333

 
$
(7,031
)
 
 
 
 
 
 
 
Net Income Per Share
 
 
 
 
 
 
Basic
 
$
.48

 
$
.74

 
$
(.26
)
Diluted
 
.45

 
.70

 
(.25
)
Weighted Average Shares Outstanding
 
 
 
 
 

Basic
 
34,315,916

 
31,700,092

 
2,615,824

Diluted
 
36,594,476

 
33,214,953

 
3,379,523


9


    
State Bank Financial Corporation
3Q15 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
3Q15 change vs
(Dollars in thousands)
 
3Q15
 
2Q15
 
1Q15
 
4Q14
 
3Q14
 
2Q15
 
3Q14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Composition of Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Organic loans (1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction, land & land development
 
$
412,788

 
$
399,982

 
$
388,148

 
$
310,987

 
$
324,008

 
$
12,806

 
$
88,780

Other commercial real estate
 
705,616

 
634,943

 
606,347

 
609,478

 
591,672

 
70,673

 
113,944

Total commercial real estate
 
1,118,404

 
1,034,925

 
994,495

 
920,465

 
915,680

 
83,479

 
202,724

Residential real estate
 
127,823

 
118,612

 
107,554

 
91,448

 
80,231

 
9,211

 
47,592

Owner-occupied real estate
 
212,171

 
205,805

 
191,557

 
188,933

 
164,514

 
6,366

 
47,657

Commercial, financial & agricultural
 
165,305

 
126,157

 
108,929

 
90,930

 
102,417

 
39,148

 
62,888

Leases
 
54,814

 
26,709

 
21,491

 
19,959

 
19,636

 
28,105

 
35,178

Consumer
 
16,432

 
12,078

 
9,442

 
8,658

 
9,445

 
4,354

 
6,987

Total organic loans
 
1,694,949

 
1,524,286

 
1,433,468

 
1,320,393

 
1,291,923

 
170,663

 
403,026

Purchased non-credit impaired loans(2):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction, land & land development
 
37,326

 
61,089

 
67,129

 
2,166

 
—

 
(23,763
)
 
37,326

Other commercial real estate
 
79,878

 
91,212

 
94,917

 
26,793

 
—

 
(11,334
)
 
79,878

Total commercial real estate
 
117,204

 
152,301

 
162,046

 
28,959

 
—

 
(35,097
)
 
117,204

Residential real estate
 
75,987

 
82,668

 
88,871

 
43,669

 
—

 
(6,681
)
 
75,987

Owner-occupied real estate
 
69,619

 
73,409

 
77,946

 
22,743

 
—

 
(3,790
)
 
69,619

Commercial, financial & agricultural
 
19,529

 
28,656

 
42,494

 
11,635

 
—

 
(9,127
)
 
19,529

Consumer
 
3,080

 
3,505

 
4,517

 
791

 
—

 
(425
)
 
3,080

Total purchased non-credit impaired loans
 
285,419

 
340,539

 
375,874

 
107,797

 
—

 
(55,120
)
 
285,419

Purchased credit impaired loans (3):
 
 
 
 
 
 
 
 
 
 
 

 

Construction, land & land development
 
16,473

 
20,002

 
18,791

 
24,544

 
25,463

 
(3,529
)
 
(8,990
)
Other commercial real estate
 
42,637

 
48,187

 
54,211

 
58,680

 
54,573

 
(5,550
)
 
(11,936
)
Total commercial real estate
 
59,110

 
68,189

 
73,002

 
83,224

 
80,036

 
(9,079
)
 
(20,926
)
Residential real estate
 
67,218

 
70,537

 
74,876

 
78,793

 
80,859

 
(3,319
)
 
(13,641
)
Owner-occupied real estate
 
30,655

 
35,036

 
39,210

 
42,168

 
48,834

 
(4,381
)
 
(18,179
)
Commercial, financial & agricultural
 
2,132

 
3,234

 
3,427

 
1,953

 
2,790

 
(1,102
)
 
(658
)
Consumer
 
208

 
365

 
332

 
201

 
283

 
(157
)
 
(75
)
Total purchased credit impaired loans
 
159,323

 
177,361

 
190,847

 
206,339

 
212,802

 
(18,038
)
 
(53,479
)
Total loans
 
$
2,139,691

 
$
2,042,186

 
$
2,000,189

 
$
1,634,529

 
$
1,504,725

 
$
97,505

 
$
634,966

Composition of Deposits
 
 
 
 
 
 
 
 
 
 
 


 


Noninterest-bearing demand deposits
 
$
823,146

 
$
762,100

 
$
691,938

 
$
577,295

 
$
524,634

 
$
61,046

 
$
298,512

Interest-bearing transaction accounts
 
499,434

 
497,715

 
562,378

 
495,966

 
377,220

 
1,719

 
122,214

Savings and money market deposits
 
1,059,770

 
1,038,292

 
1,052,677

 
954,626

 
910,488

 
21,478

 
149,282

Time deposits less than $250,000
 
289,815

 
301,431

 
319,118

 
247,757

 
234,145

 
(11,616
)
 
55,670

Time deposits $250,000 or greater
 
56,750

 
59,105

 
58,076

 
18,946

 
20,418

 
(2,355
)
 
36,332

Brokered and wholesale time deposits
 
66,273

 
77,642

 
93,748

 
97,092

 
89,069

 
(11,369
)
 
(22,796
)
Total deposits
 
$
2,795,188

 
$
2,736,285

 
$
2,777,935

 
$
2,391,682

 
$
2,155,974

 
$
58,903

 
$
639,214

 
(1) Loans originated by State Bank and Trust Company ("State Bank").
(2) Consists of loans purchased through the Bank of Atlanta and First Bank acquisitions.
(3) Acquired loans, which at acquisition, management determined it was probable that we would be unable to collect all contractual principal and interest payments due, including all loans acquired from the FDIC.


10


State Bank Financial Corporation
3Q15 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
3Q15 change vs
(Dollars in thousands)
 
3Q15
 
2Q15
 
1Q15
 
4Q14
 
3Q14
 
2Q15
 
3Q14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan and lease losses on organic loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning Balance
 
$
19,594

 
$
19,424

 
$
18,392

 
$
18,828

 
$
17,885

 
$
170

 
$
1,709

Charge-offs
 
(63
)
 
(64
)
 
(76
)
 
(1,250
)
 
(87
)
 
1

 
24

Recoveries
 
31

 
12

 
38

 
39

 
30

 
19

 
1

Net (charge-offs) recoveries
 
(32
)
 
(52
)
 
(38
)
 
(1,211
)
 
(57
)
 
20

 
25

Provision for loan and lease losses
 
614

 
222

 
1,070

 
775

 
1,000

 
392

 
(386
)
Ending Balance
 
$
20,176

 
$
19,594

 
$
19,424

 
$
18,392

 
$
18,828

 
$
582

 
$
1,348

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan and lease losses on purchased loans (1) (2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning Balance
 
$
9,975

 
$
10,558

 
$
10,246

 
$
8,403

 
$
17,722

 
$
(583
)
 
$
(7,747
)
Charge-offs
 
(3,282
)
 
(2,201
)
 
(3,231
)
 
(898
)
 
(5,329
)
 
(1,081
)
 
2,047

Recoveries
 
2,940

 
1,227

 
924

 
2,410

 
2,417

 
1,713

 
523

Net (charge-offs) recoveries
 
(342
)
 
(974
)
 
(2,307
)
 
1,512

 
(2,912
)
 
632

 
2,570

Provision for loan and lease losses
 
(879
)
 
391

 
2,619

 
331

 
(6,407
)
 
(1,270
)
 
5,528

Ending Balance
 
$
8,754

 
$
9,975

 
$
10,558

 
$
10,246

 
$
8,403

 
$
(1,221
)
 
$
351

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming organic assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans
 
$
1,848

 
$
1,649

 
$
1,428

 
$
1,245

 
$
740

 
$
199

 
$
1,108

Troubled debt restructurings
 
3,269

 
3,322

 
3,374

 
4,301

 
875

 
(53
)
 
2,394

Total nonperforming organic loans
 
5,117

 
4,971

 
4,802

 
5,546

 
1,615

 
146

 
3,502

Other real estate owned
 
500

 
160

 
—

 
74

 
410

 
340

 
90

Total nonperforming organic assets
 
$
5,617

 
$
5,131

 
$
4,802

 
$
5,620

 
$
2,025

 
$
486

 
$
3,592

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios for organic assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annualized QTD charge-offs (recoveries) to average organic loans
 
.01
 %
 
.01
%
 
.01
%
 
.36
 %
 
.02
%
 
—
 %
 
(.01
)%
Nonperforming loans to organic loans
 
.30

 
.33

 
.33

 
.42

 
.13

 
(.03
)
 
.17

Nonperforming assets to organic loans + OREO
 
.33

 
.34

 
.33

 
.43

 
.16

 
(.01
)
 
.17

Past due loans to organic loans
 
.08

 
.08

 
.11

 
.17

 
.10

 
—

 
(.02
)
Allowance for loan and lease losses to organic loans
 
1.19

 
1.29

 
1.36

 
1.39

 
1.46

 
(.10
)
 
(.27
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios for purchased non-credit impaired loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annualized QTD charge-offs (recoveries) to average PNCI loans
 
(.01
)%
 
.04
%
 
—
%
 
—
 %
 
N/A

 
(.05
)%
 
N/A

Nonperforming loans to PNCI loans
 
.57

 
.07

 
.04

 
.10

 
N/A

 
.50

 
N/A

Past due loans to PNCI loans
 
.64

 
.49

 
.36

 
.46

 
N/A

 
.15

 
N/A

 
 
 
 
 
 
 
 
 
 
 
 


 


Ratios for purchased credit impaired loans (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annualized QTD charge-offs (recoveries) to average PCI loans
 
.83
 %
 
2.07
%
 
4.81
%
 
(2.80
)%
 
5.37
%
 
(1.24
)%
 
(4.54
)%
Past due loans to PCI loans
 
14.15

 
13.30

 
18.48

 
15.62

 
15.14

 
.85

 
(.99
)
Allowance for loan and lease losses to PCI loans
 
5.49

 
5.62

 
5.53

 
4.97

 
3.95

 
(.13
)
 
1.54

 
(1) Includes purchased non-credit impaired and purchased credit impaired activity. Net recoveries (charge-offs) for purchased non-credit impaired loans were $6,000 for 3Q15, $(46,000) for 2Q15 and $(2,000) for 2Q15 with a corresponding provision for loan and lease losses for each of the periods, resulting in no ending allowance for purchased non-credit impaired loans at each period end.
(2) Allowance for loan and lease losses amount attributable to FDIC loss share agreements for purchased credit impaired loans was $0 for
3Q15, $(549,000) for 2Q15, $(496,000) for 1Q15, $83,000 for 4Q14, and $5.8 million for 3Q14.
(3) For each period presented, a portion of the Company's purchased credit impaired loans were contractually past due; however, such delinquencies
were included in the Company's performance expectations in determining the fair values of purchased credit impaired loans at each acquisition and at subsequent valuation dates. All purchased credit impaired loan cash flows and the timing of such cash flows continue to be estimable and probable of collection and thus accretion income continues to be recognized on these assets. As such, purchased credit impaired loans are not considered to be nonperforming assets.

11


State Bank Financial Corporation
3Q15 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
3Q15 change vs
(Dollars in thousands)
 
3Q15
 
2Q15
 
1Q15
 
4Q14
 
3Q14
 
2Q15
 
3Q14
Average Balances
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits in other financial institutions
 
$
179,526

 
$
191,653

 
$
320,248

 
$
450,362

 
$
476,190

 
(12,127
)
 
(296,664
)
Investment securities
 
837,786

 
821,998

 
807,002

 
603,101

 
523,488

 
15,788

 
314,298

Loans, excluding purchased credit impaired (1)
 
1,969,651

 
1,920,219

 
1,791,537

 
1,430,495

 
1,246,008

 
49,432

 
723,643

Purchased credit impaired loans
 
167,095

 
179,579

 
194,471

 
214,518

 
215,318

 
(12,484
)
 
(48,223
)
Total earning assets
 
3,154,058

 
3,113,449

 
3,113,258

 
2,698,476

 
2,461,004

 
40,609

 
693,054

Total nonearning assets
 
189,965

 
202,975

 
210,455

 
159,733

 
148,772

 
(13,010
)
 
41,193

Total assets
 
3,344,023

 
3,316,424

 
3,323,713

 
2,858,209

 
2,609,776

 
27,599

 
734,247

Interest-bearing transaction accounts
 
486,514

 
522,147

 
507,087

 
433,545

 
376,052

 
(35,633
)
 
110,462

Savings & money market deposits
 
1,042,941

 
1,035,706

 
1,072,818

 
958,782

 
896,503

 
7,235

 
146,438

Time deposits less than $250,000
 
295,304

 
309,725

 
327,807

 
240,509

 
239,924

 
(14,421
)
 
55,380

Time deposits $250,000 or greater
 
57,511

 
57,375

 
56,529

 
66,009

 
20,906

 
136

 
36,605

Brokered and wholesale time deposits
 
70,004

 
82,840

 
103,464

 
86,371

 
96,743

 
(12,836
)
 
(26,739
)
Other borrowings
 
15,507

 
11,667

 
27,742

 
7,385

 
2,778

 
3,840

 
12,729

Total interest-bearing liabilities
 
1,967,781

 
2,019,460

 
2,095,447

 
1,792,601

 
1,632,906

 
(51,679
)
 
334,875

Noninterest-bearing deposits
 
814,040

 
739,025

 
648,379

 
554,350

 
495,531

 
75,015

 
318,509

Other liabilities
 
32,704

 
32,680

 
54,619

 
50,121

 
32,357

 
24

 
347

Shareholders’ equity
 
529,498

 
525,259

 
525,268

 
461,137

 
448,982

 
4,239

 
80,516

Total liabilities and shareholders' equity
 
3,344,023

 
3,316,424

 
3,323,713

 
2,858,209

 
2,609,776

 
27,599

 
734,247

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Margins (2)
 
 
 
 
 
 
 
 
 
 
 


 


Interest-bearing deposits in other financial institutions
 
.27
%
 
.29
%
 
.27
%
 
.26
%
 
.26
%
 
(.02
)%
 
.01
 %
Investment securities, tax-equivalent basis (3)
 
1.86

 
1.90

 
1.72

 
1.73

 
1.70

 
(.04
)
 
.16

Loans, excluding purchased credit impaired, tax-equivalent basis (4)
 
4.91

 
4.84

 
4.87

 
4.85

 
5.17

 
.07

 
(.26
)
Purchased credit impaired loans
 
26.49

 
18.68

 
33.51

 
26.12

 
38.90

 
7.81

 
(12.41
)
Total earning assets
 
4.98
%
 
4.58
%
 
5.37
%
 
5.08
%
 
6.44
%
 
.40
 %
 
(1.46
)%
Interest-bearing transaction accounts
 
.13

 
.14

 
.14

 
.13

 
.13

 
(.01
)
 
—

Savings & money market deposits
 
.47

 
.46

 
.45

 
.46

 
.46

 
.01

 
.01

Time deposits less than $250,000
 
.38

 
.24

 
.21

 
.43

 
.54

 
.14

 
(.16
)
Time deposits $250,000 or greater
 
.36

 
.99

 
1.03

 
.75

 
.78

 
(.63
)
 
(.42
)
Brokered and wholesale time deposits
 
.97

 
.97

 
.94

 
1.02

 
1.08

 
—

 
(.11
)
Other borrowings
 
1.69

 
2.23

 
.98

 
3.55

 
9.00

 
(.54
)
 
(7.31
)
Total interest-bearing liabilities
 
.40
%
 
.39
%
 
.38
%
 
.43
%
 
.45
%
 
.01
 %
 
(.05
)%
Net interest spread
 
4.58
%
 
4.19
%
 
4.99
%
 
4.65
%
 
5.99
%
 
.39
 %
 
(1.41
)%
Net interest margin
 
4.73
%
 
4.33
%
 
5.11
%
 
4.80
%
 
6.13
%
 
.40
 %
 
(1.40
)%
Net interest margin excluding accretion income
 
3.52
%
 
3.45
%
 
3.22
%
 
2.96
%
 
2.99
%
 
.07
 %
 
.53
 %
 
(1) Includes average nonaccrual loans of $5.9 million for 3Q15, $4.9 million for 2Q15, $5.1 million for 1Q15, $5.6 million for 4Q14, and $1.7 million for 3Q14.
(2) Interest income or expense annualized for the applicable period.
(3) Reflects taxable equivalent adjustments using the federal statutory tax rate of 35% in adjusting interest on tax-exempt securities to a fully taxable basis. The taxable equivalent adjustments included above amount to $4,000 for 3Q15, $5,000 for 2Q15, $27,000 for 1Q15, $4,000 for 4Q14, and $7,000 for 3Q14.
(4) Reflects taxable equivalent adjustments using the federal statutory tax rate of 35% in adjusting tax-exempt loan interest income to a fully taxable basis. The taxable equivalent adjustments included above amount to $179,000 for 3Q15, $104,000 for 2Q15, $98,000 for 1Q15, $80,000 for 4Q14, and $75,000 for 3Q14.




12



State Bank Financial Corporation
3Q15 Financial Supplement: Table 8
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
3Q15 change vs
(dollars in thousands, except per share amounts; taxable equivalent)
3Q15
 
2Q15
 
1Q15
 
4Q14
 
3Q14
 
2Q15
 
3Q14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income - taxable equivalent
$
39,607

 
$
35,576

 
$
41,196

 
$
34,552

 
$
39,899

 
$
4,031

 
$
(292
)
Taxable equivalent adjustment
(183
)
 
(109
)
 
(125
)
 
(84
)
 
(82
)
 
(74
)
 
(101
)
Interest income (GAAP)
$
39,424

 
$
35,467

 
$
41,071

 
$
34,468

 
$
39,817

 
$
3,957

 
$
(393
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income - taxable equivalent
$
37,630

 
$
33,604

 
$
39,217

 
$
32,629

 
$
38,042

 
$
4,026

 
$
(412
)
Taxable equivalent adjustment
(183
)
 
(109
)
 
(125
)
 
(84
)
 
(82
)
 
(74
)
 
(101
)
Net interest income (GAAP)
$
37,447

 
$
33,495

 
$
39,092

 
$
32,545

 
$
37,960

 
$
3,952

 
$
(513
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted (amortization) accretion of FDIC receivable for loss share agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted (amortization) accretion of FDIC receivable for loss share agreements
$
—

 
$
(492
)
 
$
(1,448
)
 
$
1,652

 
$
(196
)
 
$
492

 
$
196

Loss share termination
—

 
(14,548
)
 
—

 
—

 
—

 
14,548

 
—

(Amortization) accretion of FDIC receivable for loss share agreements (GAAP)
$
—

 
$
(15,040
)
 
$
(1,448
)
 
$
1,652

 
$
(196
)
 
$
15,040

 
$
196

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating noninterest income reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating noninterest income
$
8,894

 
$
8,827

 
$
8,802

 
$
6,937

 
$
3,428

 
$
67

 
$
5,466

Loss share termination
—

 
(14,548
)
 
—

 
—

 
—

 
14,548

 
—

Total noninterest income (GAAP)
$
8,894

 
$
(5,721
)
 
$
8,802

 
$
6,937

 
$
3,428

 
$
14,615

 
$
5,466

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating noninterest expense reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating noninterest expense
$
28,687

 
$
30,038

 
$
29,585

 
$
23,999

 
$
22,207

 
$
(1,351
)
 
$
6,480

Merger-related expenses
717

 
876

 
137

 
306

 
223

 
(159
)
 
494

Severance costs
3,012

 
443

 
365

 
1,494

 
80

 
2,569

 
2,932

Total noninterest expense (GAAP)
$
32,416

 
$
31,357

 
$
30,087

 
$
25,799

 
$
22,510

 
$
1,059

 
$
9,906

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income before taxes reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income before taxes
$
18,102

 
$
12,329

 
$
15,241

 
$
14,378

 
$
18,847

 
$
5,773

 
$
(745
)
Loss share termination
—

 
(14,548
)
 
—

 
—

 
—

 
14,548

 
—

Merger-related expenses
(717
)
 
(876
)
 
(137
)
 
(306
)
 
(223
)
 
159

 
(494
)
Severance costs
(3,012
)
 
(443
)
 
(365
)
 
(1,494
)
 
(80
)
 
(2,569
)
 
(2,932
)
Taxable equivalent adjustment to interest income
(183
)
 
(109
)
 
(125
)
 
(84
)
 
(82
)
 
(74
)
 
(101
)
Income (loss) before taxes (GAAP)
$
14,190

 
$
(3,647
)
 
14,614

 
12,494

 
$
18,462

 
$
17,837

 
$
(4,272
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 

13


State Bank Financial Corporation
3Q15 Financial Supplement: Table 8 (continued)
Condensed Operating Results to GAAP Earnings Reconciliation (1)
Quarterly (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
3Q15 change vs
(dollars in thousands, except per share amounts; taxable equivalent)
3Q15
 
2Q15
 
1Q15
 
4Q14
 
3Q14
 
2Q15
 
3Q14
Operating income tax reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income tax expense
$
6,696

 
$
4,620

 
$
5,729

 
$
5,689

 
$
7,157

 
$
2,076

 
$
(461
)
Loss share termination tax benefit
—

 
(5,627
)
 
—

 
—

 
—

 
5,627

 
—

Merger-related expenses tax benefit
(277
)
 
(339
)
 
(53
)
 
(118
)
 
(86
)
 
62

 
(191
)
Severance costs tax benefit
(1,165
)
 
(171
)
 
(141
)
 
(578
)
 
(31
)
 
(994
)
 
(1,134
)
Taxable equivalent adjustment to interest income
(183
)
 
(109
)
 
(125
)
 
(84
)
 
(82
)
 
(74
)
 
(101
)
Income tax expense (GAAP)
$
5,071

 
$
(1,626
)
 
$
5,410

 
$
4,909

 
$
6,958

 
$
6,697

 
$
(1,887
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
$
11,406

 
$
7,709

 
$
9,512

 
$
8,689

 
$
11,690

 
$
3,697

 
$
(284
)
Loss share termination, net of tax benefit
—

 
(8,921
)
 
—

 
—

 
—

 
8,921

 
—

Merger-related expenses, net of tax benefit
(440
)
 
(537
)
 
(84
)
 
(188
)
 
(137
)
 
97

 
(303
)
Severance costs, net of tax benefit
(1,847
)
 
(272
)
 
(224
)
 
(916
)
 
(49
)
 
(1,575
)
 
(1,798
)
Net income (GAAP)
$
9,119

 
$
(2,021
)
 
$
9,204

 
$
7,585

 
$
11,504

 
$
11,140

 
(2,385
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book value per common share reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible book value per common share
$
13.78

 
$
13.51

 
$
13.70

 
$
13.97

 
$
13.83

 
$
0.27

 
$
(.05
)
Effect of goodwill and other intangibles
1.10

 
1.11

 
1.11

 
.41

 
.37

 
(.01
)
 
.73

Book value per common share (GAAP)
$
14.88

 
$
14.62

 
$
14.81

 
$
14.38

 
$
14.20

 
$
0.26

 
$
.68

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average equity to average assets reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Average tangible common equity to average assets
14.63
%
 
14.63
%
 
14.59
%
 
15.66
%
 
16.75
%
 
—
 %
 
(2.12
)%
Effect of average goodwill and other intangibles
1.20

 
1.21

 
1.21

 
.47

 
.45

 
(.01
)
 
.75

Average equity to average assets (GAAP)
15.83
%
 
15.84
%
 
15.80
%
 
16.13
%
 
17.20
%
 
(.01
)%
 
(1.37
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating efficiency ratio
61.66
%
 
70.79
%
 
61.61
%
 
60.66
%
 
53.55
%
 
(9.13
)%
 
8.11
 %
Effect of tax equivalent adjustment to interest income, loss share termination, merger-related expenses, and severance costs
8.29
%
 
42.11

 
1.21

 
4.68

 
.84

 
(33.82
)%
 
7.45
 %
Efficiency ratio (GAAP)
69.95
%
 
112.90
%
 
62.82
%
 
65.34
%
 
54.39
%
 
(42.95
)%
 
15.56
 %
 
(1) Management evaluates the capital position and operating performance of State Bank Financial Corporation (the “Company”) by using certain financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), including: interest income - taxable equivalent, net interest income - taxable equivalent, adjusted (amortization) accretion of FDIC receivable for loss share agreements, operating noninterest income, operating noninterest expense, operating income before taxes - taxable equivalent, operating income tax expense, tangible book value per common share and operating efficiency ratio. The Company has included these

14


non-GAAP financial measures in this press release for the applicable periods presented. Management believes that the presentation of these non-GAAP financial measures (a) provides important supplemental information that contributes to a proper understanding of the Company’s operating performance, (b) enables a more complete understanding of factors and trends affecting the Company’s business, and (c) allows investors to evaluate the Company’s performance in a manner similar to management, the financial services industry, bank stock analysts, and bank regulators. Management uses non-GAAP measures as follows: preparation of the Company’s operating budgets, monthly financial performance reporting, and presentation to investors of Company performance.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the accompanying table. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. These non-GAAP financial measures should not be considered as substitutes for GAAP financial measures, and the Company strongly encourages investors to review the GAAP financial measures included in this press release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this press release with other companies’ non-GAAP financial measures having the same or similar names.

15
State Bank Financial Corporation 3rd Quarter 2015 Earnings Presentation Joe Evans, Chairman and CEO Tom Wiley, Vice Chairman and President Sheila Ray, EVP and Chief Financial Officer David Black, EVP and Chief Credit Officer October 22, 2015

 
2 Cautionary Note Regarding Forward-Looking Statements Certain statements contained in this presentation that are not statements of historical fact are forward-looking statements. These forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words “will,” “expect,” “should,” “anticipate,” and “project,” as well as similar expressions. These forward-looking statements include statements related to the expected cost savings and the timing of such savings related to our efficiency initiatives (slides 3 and 8), the direct expense savings and loan recovery income from the early termination of loss share and our ability to recapture the tangible book value dilution (slide 3), the expected annual origination and yields from our equipment finance division (slide 5), our revenue trends and the anticipated results of our focus on efficiency. In the course of management’s discussion of this presentation, they may address other forward-looking topics, including expected cost savings related to our recent acquisitions, the sustainability of our core operating franchise, the strength of our credit metrics on our organic loans, the opportunity to use the mortgage and SBA platforms from our recent acquisitions, the growth of our payroll business, our projected growth, continued improvement in our deposit funding mix, our well-positioned franchise, our execution of strategic priorities, our anticipated future financial performance, and management’s long-term performance goals, as well as statements relating to the anticipated effects on results of operations and financial condition from expected developments or events, including projections of future accretion on loans, anticipated internal growth, and plans to establish or acquire banks or the assets of failed banks. These forward-looking statements involve significant risks and uncertainties that could cause our actual results to differ materially from those anticipated in such statements. Potential risks and uncertainties include the following: • negative reactions to our recent acquisitions by the customers, employees and counterparties of the acquired banks, or difficulties related to the transition of services; • general economic conditions (both generally and in our markets) may be less favorable than expected, which could result in, among other things, a deterioration in credit quality, a reduction in demand for credit and a decline in real estate values; • a general decline in the real estate and lending markets, particularly in our market areas, could negatively affect our financial results; • costs or difficulties related to the integration of the banks we have acquired or may acquire may be greater than expected; • restrictions or conditions imposed by our regulators on our operations may make it more difficult for us to achieve our goals; • legislative or regulatory changes, including changes in accounting standards and compliance requirements, may adversely affect us; • competitive pressures among depository and other financial institutions may increase significantly; • changes in the interest rate environment may reduce margins or the volumes or values of the loans we make or have acquired; • other financial institutions have greater financial resources and may be able to develop or acquire products that enable them to compete more successfully than we can; • our ability to attract and retain key personnel can be affected by the increased competition for experienced employees in the banking industry; • adverse changes may occur in the bond and equity markets; • war or terrorist activities may cause deterioration in the economy or cause instability in credit markets; • economic, governmental or other factors may prevent the projected population, residential and commercial growth in the markets in which we operate; and • we will or may continue to face the risk factors discussed from time to time in the periodic reports we file with the SEC. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this report. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. See Item 1A, Risk Factors, in our Annual Report on Form 10-K for the most recently ended fiscal year, for a description of some of the important factors that may affect actual outcomes.

 
3 Executing on Strategic Priorities Growing Noninterest Income Core Deposit Funding Mix Progress in Efficiency Actions  Noninterest income is up 145% year-over-year reflecting continued success in the fee income businesses acquired in our two recent bank acquisitions  Key initiatives to grow mortgage, SBA and payroll fee income providing significant benefits  Average noninterest-bearing deposits increased for the 14th consecutive quarter and now represent nearly 30% of total deposits  Cost of funds remains very low at 28 bps  Approximately $9mm of cost savings related to efficiency initiatives expected by the second quarter of 2016  Direct expense savings and loan recovery income from early termination of loss share should allow us to recapture the tangible book value dilution within our initial projections Strong Loan Growth  $98mm of net loan growth in 3Q15, while maintaining very strong credit metrics  $116mm of organic and PNCI loan growth, offset by $18mm reduction in PCI loans  Patriot Capital acquisition will add a new lending vehicle with attractive yields

 
4 Notes: Consolidated financial results for 3Q 2015 contained throughout this presentation are unaudited; numbers may not add due to rounding. Includes certain financial information determined by methods other than in accordance with GAAP (for more information, refer to Table 8 on page 13 of the corresponding press release). 3Q15 Results Summary  3Q15 operating income of $11.4 million, or $.31 per diluted share  Total loan growth of $97.5 million during 3Q15, including purchased loan run-off  Solid growth in transaction deposit accounts  Increased 3Q15 dividend to $.07 per common share, the third consecutive quarterly increase  Announced additional efficiency actions in 3Q15 Income Statement Highlights (dollars in thousands, except per share data) 3Q15 2Q15 3Q14 Interest income on loans $24,397 $23,174 $16,237 Accretion income on loans 11,156 8,365 21,110 Interest income on invested funds 4,054 4,037 2,552 Total interest income 39,607 35,576 39,899 Interest expense 1,977 1,972 1,857 Net interest income 37,630 33,604 38,042 Provision for loan losses (265) 64 416 Net interest income after provision for loan losses 37,895 33,540 37,626 Noninterest income 8,894 9,319 3,624 Amortization of FDIC receivable - (492) (196) Operating noninterest expense 28,687 30,038 22,207 Operating income before taxes 18,102 12,329 18,847 Operating income tax expense 6,696 4,620 7,157 Operating income 11,406 7,709 11,690 Nonoperating expenses, net of tax benefit (2,287) (9,730) (186) Net income (loss) available to common shareholders $9,119 ($2,021) $11,504 Diluted net income (loss) per share .25 (.06) .35 Dividends per share .07 .06 .04 Tangible book value per share 13.78 13.51 13.83 Balance Sheet Highlights (period-end) Total Loans $2,139,691 $2,042,186 $1,504,725 Organic 1,694,949 1,524,286 1,291,923 Purchased non-credit impaired 285,419 340,539 - Purchased credit impaired 159,323 177,361 212,802 Total assets 3,388,673 3,300,308 2,647,597 Noninterest-bearing deposits 823,146 762,100 524,634 Total deposits 2,795,188 2,736,285 2,155,974 Shareholders’ equity 532,161 522,984 458,277

 
5 Solid Loan Growth ($ i n mi llio n s) ($ i n mi llio n s) 1 Organic loans; excludes purchased loans Note: New loan originations include new loans funded and net loan advances on existing commitments. Paydowns include payoffs, amortization and principal payments.  $97.5mm of net loan growth including purchased loans  $115.5mm of organic and PNCI loan growth in 3Q15  Total loans outstanding impacted by runoff in purchased portfolios  Record originations in 3Q15  Short duration of CRE loan portfolio continues to drive high level of paydowns  Equipment Finance Division expected to originate over $30mm in annual production with yields above 6% 1,635 2,000 2,042 2,158 2,121 2,140 113 91 171 268 (35) (55) (15) (13) (18) 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 4Q14 1Q15 2Q15 3Q15 Loan Portfolio Roll-forward Total Loans Organic PNCI PCI 0 200 400 600 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Organic New Loan Fundings vs. Paydowns 1 New Loan Fundings Paydowns

 
6 Attractive Funding Mix  Continued focus on increasing transaction deposits, which include NIB demand deposits and IB transaction accounts  Period-end transaction deposit accounts increased $63mm in 3Q15 ($ i n mi llio n s) 0 100 200 300 400 500 600 700 800 900 3Q14 4Q14 1Q15 2Q15 3Q15 Transaction Deposit Accounts Interest-bearing Noninterest-bearing NIB 29% IB Transaction 18% Savings & MMA 38% CDs 12% Brokered/ Wholesale 2%  Deposit funding mix contributes to low cost of funds of 28 bps, down 1 bp versus the prior quarter and down 7 bps from the prior year period  Average noninterest-bearing deposits increased for the 14th consecutive quarter 3Q15 Deposit Composition

 
7 1 Excludes accretion income on loans 2 Excludes (amortization)/accretion of FDIC receivable; other noninterest income excludes gain on securities  Continue to replace accretion with interest income from organic and purchased non- credit impaired portfolios  Total interest income of $28.3mm, excluding accretion, is up $9.6mm, or 51%, from 3Q14 ($ i n t h o u sa n d s) ($ i n t h o u sa n d s)  Significant year-over-year progress as noninterest income of $8.9mm in 3Q15 is up 145% from 3Q14  Mortgage production of $146mm in the third quarter, leading to $3.1mm in fee income  SBA team production of $17.8mm in 3Q15, leading to total SBA income of $1.7mm  Payroll fee income increased 15% year-over-year Strong Revenue Trends 0 2,000 4,000 6,000 8,000 10,000 3Q14 4Q14 1Q15 2Q15 3Q15 Noninterest Income 2 Other NII Mortgage SBA Payroll 10,000 15,000 20,000 25,000 30,000 3Q14 4Q14 1Q15 2Q15 3Q15 Interest Income 1

 
8 Focus on Efficiency  Announced organizational realignment with approximately $9mm of cost savings expected by the second quarter of 2016, with the majority of savings related to salaries and benefits expense  Approximately 70% of the efficiency initiatives have been completed, with the remainder expected by the first quarter of 2016  Recorded $3.0mm of severance expenses related to efficiency initiatives and $717,000 of merger-related expenses in the third quarter 1 Operating expense excludes severance and merger-related expenses 2 Excludes (amortization)/accretion of FDIC receivable 2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 3.20% 3.40% 3.60% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 (Noninterest Expense 1 – Noninterest Income 2 ) / Average Assets Total Expense Operating Expense

 
9 ($ i n t h o u sa n d s) Maintaining Solid Asset Quality  Strong performance of organic and purchased non-credit impaired portfolios Organic metrics  Past due loans: .08%  NPAs: .33%  Average NCOs: .01%  Allowance: 1.19% (covers NPAs by 3.6x) N PA s / Orga n ic L o an s + OR EO ($ i n t h o u sa n d s) 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 0 2,000 4,000 6,000 8,000 10,000 3Q14 4Q14 1Q15 2Q15 3Q15 Organic Nonperforming Assets NPLs OREO NPAs / Organic Loans + OREO 0 50,000 100,000 150,000 200,000 250,000 3Q14 4Q14 1Q15 2Q15 3Q15 PCI Loans & OREO PCI Loans OREO  Decreasing exposure to distressed assets as purchased credit impaired loans are down 25% year-over-year  PCI loans: $159mm, a 32% discount to unpaid principal balance of $234mm  OREO: $11mm, down 25% year-over- year

 




Media Contact:         David Rubinger 404.502.1240 / [email protected]
Investor Relations Contact:    Jeremy Lucas 404.239.8626 / [email protected]


State Bank and Trust Company Acquires
Patriot Capital Corporation’s Equipment Finance Group

ATLANTA AND MACON, GA, October 22, 2015 - State Bank and Trust Company, a wholly-owned subsidiary of State Bank Financial Corporation (NASDAQ: STBZ), announced today that it has purchased the equipment finance origination platform of Patriot Capital Corporation, a leading provider of equipment financing to the retail petroleum industry. The terms of the transaction were not disclosed.
“Equipment financing is a business we have long wanted to enter, and we have found a great fit with Patriot Capital, one of the largest equipment lenders in the retail fueling industry. We believe this acquisition is an attractive use of capital that will broaden our asset generating capabilities through additional growth and diversification of our loan portfolio,” said Tom Wiley, CEO of State Bank and Trust Company. “In addition, we believe we can efficiently generate significant scale by leveraging the established Patriot Capital distribution platform, creating greater value through the utilization of our existing programs and products.”
Patriot Capital Corporation is a privately owned company that was founded in 2000. The company has 17 employees and is based in Atlanta, Georgia.
In January 2015, Patriot Capital was awarded the “Best in the U.S.” honor as the nation’s best equipment financing company by the Petroleum Marketers Association of America (PMAA), which is a federation of 48 state and regional trade associations representing approximately 8,000 independent petroleum marketers nationwide.
Chris Santy, founder and president of Patriot Capital, will join State Bank as president of the newly created Patriot Finance Division. “I am excited to be joining State Bank and look forward to expanding our lending capabilities through the resources of a larger institution,” Santy said. “Our two companies align very well from a cultural and philosophical perspective. We believe the strength and power of State Bank with the industry knowledge of Patriot Capital will help make us a more formidable competitor in the equipment finance space.”

About State Bank Financial Corporation

State Bank Financial Corporation (NASDAQ: STBZ), with approximately $3.4 billion in assets as of September 30, 2015, is an Atlanta-based bank holding company for State Bank and Trust Company. State Bank operates 26 banking offices in Metro Atlanta, Middle Georgia and Augusta, Georgia, and seven mortgage origination offices.






About Patriot Capital Corporation

Patriot Capital specializes in enabling entrepreneurs to succeed by providing hassle free equipment financing in the retail petroleum fueling industries.  Working with our customers to enable them to optimize their capital structures, Patriot Capital is the leading provider of capital equipment financing and leasing to NACS (National Association of Convenience Stores) and SIGMA (Society of Independent Gasoline Marketers of America) members.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this news release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “intend,” “plan,” “seek,” “believe,” “expect,” “strategy,” “future,” “likely,” “project,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include statements regarding our acquisition of Patriot Capital Corporation, including our belief that the acquisition will broaden our asset generating capabilities through additional growth and diversification of our loan portfolio, our ability to efficiently generate scale by leveraging Patriot Capital’s distribution platform and our ability to expand and compete in the equipment finance space. Such forward-looking statements are subject to risks, uncertainties, and other factors. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that future events, plans or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. See Item 1A, Risk Factors, in our Annual Report on Form 10-K for the most recently ended fiscal year, for a description of some of the other factors that may affect actual outcomes.

To learn more about State Bank, visit www.statebt.com.

To learn more about Patriot Capital Corporation, visit http://www.patriotcapitalcorp.com/.




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