State Bank Financial Corporation announced unaudited financial results for the second quarter of 2018.  Net income for the second quarter of 2018 was $18.8 million, compared to $17.4 million in the first quarter of 2018, and $15.2 million in the second quarter of 2017. Fully diluted earnings per share were $.48 in the second quarter of 2018, compared to $.44 in the first quarter of 2018 and $.39 in the second quarter of 2017.

Joe Evans, Chairman of State Bank Financial, commented, “Our team is doing a great job of taking care of business while also working diligently to make our announced merger with Cadence Bancorporation a success. I am excited about the $16 billion regional bank we are building that will be a formidable competitor in our markets.”

Operating Highlights

Interest income on loans improved to $50.4 million in the second quarter of 2018, a $2.0 million increase from the first quarter of 2018 and a $15.5 million increase from the second quarter of 2017.  Net interest income of $56.1 million in the second quarter of 2018 increased from $54.9 million in the first quarter of 2018 and $46.5 million in the second quarter of 2017.  Accretion income on loans was $6.6 million in the second quarter of 2018, up from $5.9 million in the first quarter of 2018, but down from $9.2 million in the second quarter of 2017.

Noninterest income was $10.9 million in the second quarter of 2018, compared to $10.5 million in the first quarter of 2018 and $10.5 million in the second quarter of 2017.  Revenues from mortgage banking and SBA increased $200,000 and $60,000, respectively, in the second quarter of 2018, compared to the first quarter of 2018. Gain on sale of securities totaled $250,000 in the second quarter of 2018.

Total noninterest expense for the second quarter of 2018 was $40.0 million, compared to $39.3 million in the first quarter of 2018 and $32.0 million in the second quarter of 2017.  The increase was primarily due to $2.6 million in merger-related expenses, a $1.3 million increase compared to the first quarter of 2018. Merger expenses increased as a result of the pending merger with Cadence Bancorporation that was announced during the second quarter of 2018. Salaries and employee benefit expenses decreased $1.8 million compared to the first quarter of 2018.

Financial Condition

Total assets at June 30, 2018, were $5.0 billion, up from $4.9 billion at March 31, 2018.  Total loans were $3.6 billion at June 30, 2018, down $13.2 million from the first quarter of 2018.  Period-end organic loans increased to $2.7 billion at June 30, 2018, an increase of $148.4 million from the first quarter of 2018.  Purchased non-credit impaired loans decreased to $793.1 million at June 30, 2018, a $152.6 million linked-quarter decline.  Purchased credit impaired loans decreased to $148.5 million at June 30, 2018, a $9.1 million linked-quarter decline.

Past due organic and purchased non-credit impaired loans were .16% and .36% of their respective portfolios at June 30, 2018. The provision for loan losses on organic and purchased non-credit impaired loans was $2.6 million in the second quarter of 2018 and was primarily attributable to organic loan growth in the quarter. The organic allowance as a percent of organic loans was .99% at the end of the second quarter of 2018.

Total deposits at June 30, 2018, were $4.3 billion, up $118.3 million from March 31, 2018. Noninterest-bearing demand deposits represented 27.6% of total deposits as of June 30, 2018. Period-end and average noninterest-bearing demand deposits were $1.2 billion and $1.1 billion, respectively, a $97.4 million and $66.4 million increase from the first quarter of 2018.

Tom Wiley, Vice Chairman and CEO, commented, “We experienced solid growth in total deposits in the second quarter, which increased 3% from the first quarter, including 9% growth in noninterest-bearing deposits. We continue to focus on growing low-cost core deposits and delivering an exceptional experience for our clients.”

Tangible book value per share was $14.38 at the end of the second quarter of 2018.  State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 11.75% and a Tier I risk-based capital ratio of 12.79%.