State Bank Financial Corporation announced unaudited financial results for the fourth quarter and full year ended December 31, 2015.  Full year operating income for 2015 was $40.7 million, or $1.10 per fully diluted share, compared to $32.5 million, or $.98 per fully diluted share, for full year 2014.  Operating income for the fourth quarter of 2015 was $12.1 million, or $.33 per fully diluted share, compared to $11.4 million, or $.31 per fully diluted share, for the third quarter of 2015.  Higher accretion income, due in part to gains on loan pools that closed and recovery income, drove the increase in operating income.  Recovery income continues to be positively impacted by the termination of loss share.

Operating income excludes severance, merger-related, and loss share termination expenses that are not considered part of ongoing operations.  Including those items, full year 2015 net income was $28.4 million, compared to $30.9 million for full year 2014.  Fully diluted earnings per share were $.77 for full year 2015 compared to $.93 for full year 2014.  Net income for the fourth quarter of 2015 was $12.1 million, compared to $9.1 million for the third quarter of 2015.  Fully diluted earnings per share were $.33 in the fourth quarter of 2015, compared to $.25 in the third quarter of 2015.

Joe Evans, Chairman and CEO of State Bank Financial, commented, "We capped the year off with a strong fourth quarter that clearly reflects the impact of our 2015 strategic initiatives, which led to a significant year over year increase in noninterest income, measurable improvement in operating efficiency, and better than forecasted benefits from early termination of loss share.  I believe a combination of our strong operating momentum, opportunistic capital deployment, and a significantly increased dividend payout will be very positive for shareholder value in 2016."

Operating Highlights

Net interest income of $40.6 million in the fourth quarter of 2015 increased from $37.4 million in the third quarter of 2015 primarily due to higher accretion income on loans.  Interest income on loans, excluding purchased credit impaired loans, for the fourth quarter of 2015 was $24.3 million, up slightly from $24.2 million in the prior quarter.  Accretion income on loans was $14.2 million in the fourth quarter of 2015, up from $11.2 million in the third quarter of 2015 due primarily to gains from two loan pools closing out in the quarter and recovery income.  There were no loan pool closings during the third quarter of 2015.  As of December 31, 2015, approximately $87 million of accretable discount remains to be recognized as loan accretion income, compared to $97 million of accretable discount remaining at the end of the third quarter of 2015.

Tom Wiley, Vice Chairman and President, commented, "I am pleased to report our highest quarterly profit in over five years.  I am even more pleased with the performance in our organic loan portfolio, which continued to perform very well in the fourth quarter as past due organic loans were only 10 basis points of total organic loans."

The provision for loan losses was $494,000 in the fourth quarter of 2015, consisting of a provision expense on organic and purchased non-credit impaired loans of $951,000 and $52,000, respectively, partially offset by a $509,000 benefit to the provision on purchased credit impaired loans.

Noninterest income was $8.1 million in the fourth quarter of 2015, down from $8.9 million in the third quarter of 2015.  The decline in noninterest income was primarily due to lower mortgage banking and SBA income as a result of lower production volumes.  This decline was partially offset by an increase in payroll fee income, which posted record income in the quarter.

Total noninterest expense for the fourth quarter of 2015 was $29.6 million, a $2.9 million decrease from
the third quarter of 2015.  The decrease was due primarily to lower salary and employee benefit costs, which declined $3.4 million from the previous quarter.  The third quarter of 2015 included $3.0 million in severance expenses related to efficiency actions announced in September 2015.  There were no severance or merger-related expenses in the fourth quarter of 2015.

Mr. Wiley added, "Going forward, we expect continued loan and core deposit growth, meaningful contributions from noninterest income lines of business and to maintain our intense focus on efficiency."

Financial Condition

Total assets at December 31, 2015 were $3.5 billion, up from $3.4 billion at September 30, 2015.  Period-end organic and purchased non-credit impaired loans increased to $2.0 billion at December 31, 2015, a net increase of $34.3 million from the third quarter of 2015.  Purchased credit impaired loans decreased to $145.6 million at the end of the fourth quarter of 2015, a $13.7 million linked-quarter decline.  Total net loans, excluding loans held for sale, were $2.1 billion at December 31, 2015, up $20.4 million from the third quarter of 2015.

Total deposits at December 31, 2015 were $2.9 billion, up from $2.8 billion at the end of the third quarter of 2015.  Period-end transaction accounts, comprised of noninterest-bearing demand deposits and interest-bearing transaction accounts, increased $92.0 million from the third quarter of 2015.  Noninterest-bearing demand deposits represented 28.9% of total deposits as of December 31, 2015.  Average noninterest-bearing demand deposits increased $12.5 million from the third quarter of 2015, the 15th consecutive quarterly increase.  Average transaction accounts increased $85.1 million from the third quarter of 2015.

Tangible book value per share was $13.22 at the end of the fourth quarter of 2015.  State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 14.48% and a Tier I risk-based capital ratio of 18.05%.

Comparison to the Fourth Quarter of 2014

Comparisons to the fourth 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.

Net operating income for the quarter ended December 31, 2015 increased $3.4 million compared to the fourth quarter of 2014 primarily due to an $8.2 million increase in interest income and a $2.8 million increase in noninterest income, partially offset by higher operating expenses.  Net income increased $4.5 million from the fourth quarter of 2014.  Cost of funds for the fourth quarter of 2015 of 28 basis points was down five basis points from the fourth quarter of 2014.

Noninterest income, excluding amortization of the FDIC receivable, increased $2.8 million in the fourth  quarter of 2015 compared to the fourth 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 $5.6 million during the fourth quarter of 2015 compared to the fourth quarter of 2014. 

Total loans increased $525.7 million during the year-over-year period as growth in organic loans of $454.0 million and purchased non-credit impaired loans of $132.5 million was partially offset by a $60.8 million decline in purchased credit impaired loans.  Excluding the effect of $292.4 million of acquired loans, loan growth was $294.0 million year-over-year.

Total deposits increased $470.3 million for the quarter ended December 31, 2015, compared to the fourth quarter of 2014, including growth in noninterest-bearing deposits of $248.9 million and interest-bearing transaction accounts of $92.4 million.