Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - STATE BANK FINANCIAL CORP | dividendpressrelease-4q16.htm |
| 8-K - 8-K - STATE BANK FINANCIAL CORP | stbz-20161116x8k.htm |
State Bank Financial Corporation
November 2016
Investor Presentation
2
Cautionary Note Regarding Forward-Looking
Statements
This presentation contains forward-looking statements within the meaning of the federal securities laws. 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,” “may,” and
“project,” as well as similar expressions. Pro forma financial information is not a guarantee of future results and is presented for informational purposes only. These forward-
looking statements include, but are not limited to, statements regarding our proposed acquisitions of NBG Bancorp (“NBG”) and its subsidiary and S Bankshares and its
subsidiary, including our belief that these acquisitions will provide entry into attractive new markets and other key transaction assumptions, statements regarding our significant
opportunity for deposit growth in the Atlanta and Augusta markets, statements regarding our strategic outlook, including our forward vision (slide 8), statements regarding
building our long-term earnings power (slide 9), and other statements about expected developments or events, our future financial performance, and the execution of our
strategic goals. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions (“risk factor”) that are difficult to
predict with regard to timing, extent, likelihood and degree. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such
forward-looking statements. We undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or
otherwise. Risk factors including, without limitation, the following:
• completion of the transactions with NBG and S Bankshares is dependent on, among other things, receipt of regulatory approvals and S Bankshares shareholder approval, the
timing of which cannot be predicted and which may not be received at all;
• the impact of the completion of the transactions with NBG and S Bankshares on our financial statements will be affected by the timing of the transactions;
• the transactions may be more expensive to complete and the anticipated benefits, including anticipated cost savings and strategic gains, may be significantly harder or take
longer to achieve than expected or may not be achieved in their entirety as a result of unexpected factors or events;
• the integration of NBG’s and S Bankshares’ business and operations into ours may be more costly than anticipated or have unanticipated adverse results related to NBG’s,
S Bankshares’ or our existing businesses;
• our ability to achieve anticipated results from the transactions with NBG and S Bankshares will depend on the state of the economic and financial markets going forward;
• 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;
• 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; and
• economic, governmental or other factors may prevent the projected population, residential and commercial growth in the markets in which we operate.
In addition, risk factors include, but are not limited to, the risk factors described in Item 1A, Risk Factors, in our Annual Report on Form 10-K for the most recently ended fiscal
year. These and other risk factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a forward-
looking statement.
3
3Q16 Proforma
Total Assets $3.6 billion $4.1 billion
Total Loans $2.3 billion $2.8 billion
Total Deposits $3.0 billion $3.3 billion
Total Equity $561 million
TCE Ratio 14.5%
Dividend Yield 2.45%
Market Cap $842 million
Key Metrics
State Bank Financial Corporation Profile
Atlanta
Macon
Warner
Robins
Augusta
Savannah
Athens
Gainesville l STBZ
l NBG
l S Bank
Headquartered in Atlanta, Georgia
After closing two pending deals, State Bank
will have a footprint in 7 of the 8 largest
MSAs in Georgia, including:
31 full-service banking offices
8 mortgage origination offices
1
1 Proforma for pending acquisitions of NBG Bancorp, Inc. and S Bankshares, Inc.
STBZ Profile
4
Investment Thesis
Management team with a 30+ year track record in Georgia of successful
acquisitions / integrations and building long-term shareholder value
Strong historical growth in core deposits and organic loans
Excellent credit metrics with minimal levels of NPAs, NCOs, and past due loans
Asset-sensitive balance sheet
Robust capital levels to support growth and opportunistic transactions
Attractive dividend yield and payout ratio
Concentrated branch footprint in high-quality metro markets
Well-positioned acquirer as one of only three publicly traded banks
headquartered in Georgia with $2 billion to $5 billion in assets
5
Acquisition History
July 2009 – October 2011
12 FDIC-assisted acquisitions
Total Assets: $3.9 billion
Total Deposits: $3.6 billion
January 2015
First Bank of Georgia
Assets: $527 million
Deposits: $418 million
Announced April 2016
National Bank of Georgia
Assets: $415 million
Deposits: $323 million
February 2015
Boyett Insurance
Agency
October 2012
Altera Payroll
Services
October 2014
Bank of Atlanta
Assets: $186 million
Deposits: $149 million
October 2015
Patriot Capital
Equipment Finance
Announced May 2016
S Bank
Assets: $110 million
Deposits: $92 million
$4.1 billion
proforma assets
Prior to July 2009 Change of Control
$35 million in assets
2 Branches in Middle Georgia
2009 - 2011 2012 - 2014 2015 2016
Note: National Bank of Georgia, S Bank, and proforma metrics as of 9/30/16
6
Strong Core Deposit Base with
Significant Opportunity for Growth
Source: SNL Financial; FDIC deposit data as of 6/30/16
Middle Georgia
Average deposits per branch of
$114mm is more than twice the
average competitor deposits per
branch
Maintained #1 market share
since 2005 (including
predecessor bank)
Atlanta
Average deposits per branch of
$205mm is well above average
competitor deposits per branch
Less than 1% market share of
$153 billion in deposits presents
tremendous growth opportunity
Over 75% of the market is
dominated by large regional
and national competitors
Augusta
Represents State Bank’s newest
market, entered in January 2015
Second largest MSA in Georgia
by population and deposits
Top 10 market share with 5.3%
of deposits
Remain well-positioned to take
advantage of recent market
disruption
4th highest deposit market share in state of Georgia among Georgia-based banks
$1.2 billion in deposits in Atlanta market presents continued opportunity for significant growth
($ in 000)
MSA Deposits
Deposits /
Branch
# of
Branches
Market
Share %
Branch
Share % Deposits
Deposits /
Branch
# of
Branches
Atlanta $1,232,279 $205,380 6 0.8% 0.5% $152,900,486 $119,267 1,282
Macon / Warner Robins $1,255,244 $114,113 11 25.2% 11.8% $4,977,215 $53,518 93
Augusta $424,956 $60,708 7 5.3% 5.4% $7,995,226 $61,978 129
STBZ Total MSA
7
Core Franchise Transformation
Strong historical organic loan
growth while maintaining
exceptional credit quality
Interest income (excluding
accretion) grew at a 21%
compound annual rate from
2011 to 2015
Noninterest income in 2015
increased 138% from 2014
($ i
n
m
m
)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2011 2012 2013 2014 2015
Interest Income and Accretion
Interest Income Accretion
($ i
n
000
s)
($ i
n
000
s)
1 Excludes (amortization)/accretion of FDIC receivable and gain on acquisitions
0
10,000
20,000
30,000
40,000
2011 2012 2013 2014 2015
Noninterest Income
1
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014 2015 3Q16
Total Loan Portfolio
Organic & Purchased Non-Credit Impaired Purchased Credit Impaired
8
Grow Commercial
Relationships by
Targeting Net
Funding Segments
Scale Efficient
Asset-generating
Lines of Business
Foster a Culture
of Efficiency
Maintain Focus on
Noninterest Income
Strategic Outlook
Management Depth
Disciplined and
Experienced Acquirer
Balance Sheet Strength
Strong Credit Quality
Metrics
Shareholder Focused
Management Team with
Significant Insider
Ownership
Solid Foundation Built on
Proven Performance
Forward Vision
9
Building Long-Term Earnings Power
Strategy for Achievement
Enhancing the organization for
sustainable long-term earnings
growth through scalable fee
and asset-generating lines of
business
Funding and supporting these
lines of business through
relationship-based core
deposit growth
Continuing to provide
meaningful value-added
services to our clients
Commercial & Community Banking
Relationship-based funding and lending
Fee Income Drivers
Mortgage, SBA, Payroll
Efficient Asset
Generation
CRE, Patriot, Specialty Finance
Target
ROTCE
10% – 12%
10
Diversified Lines of Business
Commercial &
Community Banking
Core Bank Funding Engine
Atlanta, Augusta,
Middle Georgia
Mortgage
Scalable retail and wholesale
mortgage platform located
throughout the bank’s
branches and mortgage
offices across the state
Patriot Capital
Leading supplier of
equipment financing to
retail petroleum industry
since 2000
SBA Lending
SBA Preferred Lender;
recent SBA team addition
expands geographic reach
and lending verticals
Specialty Finance
Provides portfolio diversity
through purchased pools
of loans and leases
Payroll / Insurance
Consolidated service offering of
payroll, benefits, HRIS, tax, and
insurance products targeting
small and middle market
businesses
Commercial Real Estate
Highly efficient asset-generating
line of business and a core
competency of State Bank
Homebuilder Finance
Efficient team with significant
relationships in Georgia
residential homebuilder markets
11
3Q 2016 Financial Results
12
Income Statement Highlights
(dollars in thousands, except per share data) 3Q16 2Q16 3Q15
Interest income on loans $26,580 $25,406 $24,218
Accretion income on loans 9,335 13,961 11,156
Interest income on invested funds 4,714 4,726 4,050
Total interest income 40,629 44,093 39,424
Interest expense 2,504 2,371 1,977
Net interest income 38,125 41,722 37,447
Provision for loan and lease losses 88 6 (265)
Net interest income after provision for loan losses 38,037 41,716 37,712
Total noninterest income 9,769 10,230 8,894
Total noninterest expense 28,480 30,674 32,416
Income before income taxes 19,326 21,272 14,190
Income tax expense 6,885 7,287 5,071
Net income $12,441 $13,985 $9,119
Diluted earnings per share .34 .38 .25
Dividends per share .14 .14 .07
Tangible book value per share 13.99 13.77 13.78
Balance Sheet Highlights (period-end)
Total loans $2,346,346 $2,345,096 $2,139,691
Organic 2,030,457 2,004,858 1,694,949
Purchased non-credit impaired 189,053 205,705 285,419
Purchased credit impaired 126,836 134,533 159,323
Total assets 3,616,384 3,586,503 3,388,673
Noninterest-bearing deposits 890,588 829,673 823,146
Total deposits 2,959,292 2,885,490 2,795,188
Shareholders’ equity 561,134 553,356 532,161
3Q 2016 Results Summary
1 Denotes a non-GAAP financial measure; for more information, refer to Table 8 of the 3Q16 earnings press release
Note: Consolidated financial results contained throughout this presentation are unaudited; numbers may not add due to rounding
3Q16 net income of $12.4
million, or $.34 per diluted
share
Interest income on loans
and invested funds up 11%
from 3Q15
Noninterest income
increased 10% compared
to 3Q15
Noninterest expense down
12% from 3Q15
$.14 quarterly dividend
represents an attractive
2.5% yield at end of 3Q16
and 42% payout ratio in
2016 YTD
1
13
Enhancing Fundamental Performance
Interest
Income
Noninterest
Income
Core Deposit
Funding
Noninterest income contribution of $9.8mm in 3Q16
Mortgage income (+6%), SBA income (+12%), and payroll fee income (+14%)
are all higher YTD 2016 compared to YTD 2015
Average noninterest-bearing deposits represent 29% of average total deposits
Increased deposit market share in Atlanta while strengthening #1 market share
in Middle Georgia
Ongoing focus on expense control led to quarterly decline in noninterest
expense
Burden ratio1 was 2.22% for the first nine months of 2016, down from 2.62%
for the comparable period in 2015
Efficiency
Interest income on loans and invested funds increased $1.2mm (+4%) from
2Q16 and $3.0mm (+11%) from 3Q15
Net interest margin excluding accretion expanded to 3.57% in 3Q16
Average loans increased $80.0mm from the previous quarter
1 Ratio defined as annualized noninterest expense minus annualized noninterest income, excluding (amortization)/accretion of FDIC receivable, divided by average assets
14
Strong Revenue Trends – Interest Income
Growth in interest income from
organic and PNCI portfolios helped
offset the wind down of PCI loans
Total interest income (excluding
accretion) of $31.3mm in 3Q16
compared to $28.3mm in 3Q15 and
$18.7mm in 3Q14
($ i
n
000
s)
Net interest margin significantly
impacted by quarterly accretion
volatility
Net interest margin excluding
accretion of 3.57% as of 3Q16 has
improved 5 bps from 3Q15 and 57
bps from 3Q14
$17.8
$31.3
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Interest Income and Accretion
Interest Income Accretion
7.38%
4.54%
3.11% 3.57%
2%
3%
4%
5%
6%
7%
8%
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Net Interest Margin
NIM NIM excluding Accretion
15
Payroll fee income increased 12% year-over-year,
benefiting from an expanded product offering
Strong Revenue Trends – Noninterest Income
3Q16 mortgage production of $149mm, leading to a 4%
year-over-year increase in fee income
SBA production of $17mm in 3Q16
Servicing portfolio grew to $131mm in 3Q16
Total 3Q16 noninterest income of $9.8mm
($ i
n
000
s)
0
2,000
4,000
6,000
8,000
10,000
12,000
3Q15 4Q15 1Q16 2Q16 3Q16
Service Charge Other Mortgage Payroll SBA
0
50
100
150
200
0
1,000
2,000
3,000
4,000
3Q15 4Q15 1Q16 2Q16 3Q16
Pr
o
d
u
cti
o
n
($
in
m
m
)
N
o
n
in
ter
es
t
In
com
e
($ i
n
000
s)
Income Production
1,000
1,050
1,100
1,150
1,200
0
250
500
750
1,000
1,250
1,500
3Q15 4Q15 1Q16 2Q16 3Q16
# o
f C
lien
ts
N
o
n
in
ter
es
t
In
com
e
($ i
n
000
s)
Income Number of Clients
0
5
10
15
20
25
30
35
0
500
1,000
1,500
2,000
3Q15 4Q15 1Q16 2Q16 3Q16
Pr
o
d
u
cti
o
n
($
in
m
m
)
N
o
n
in
ter
es
t
In
com
e
($ i
n
000
s)
Income Production
16
Core Deposit Funding
($ i
n
m
m
)
N
IB
/ Tot
al D
ep
o
sit
s
Attractive, low-cost core deposit mix focused on transaction-based funding
Note: Average deposit balances
($ in mm)
Deposit Composition 2012 % 2013 % 2014 % 2015 % 2016 YTD %
Noninterest-bearing 342 16% 413 20% 490 23% 758 27% 844 29%
Interest-bearing transaction 318 15% 336 16% 386 18% 519 19% 529 18%
Savings & MMA 1,030 48% 928 44% 911 42% 1,060 38% 1,065 37%
CDs 476 22% 431 20% 380 18% 437 16% 427 15%
Total Deposits $2,166 $2,107 $2,166 $2,773 $2,865
10%
15%
20%
25%
30%
35%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2012 2013 2014 2015 2016 YTD
Deposit Mix
NIB IB Transaction Savings & MMA CDs NIB / Total Deposits
17
Core Deposit Funding
Maintain leading market share in middle Georgia (Macon and Warner Robins), with significant opportunity
for growth in Atlanta and Augusta markets
Continued focus on increasing
transaction deposits, which
include NIB demand deposits
and IB transaction accounts
Average noninterest-bearing
deposits represent 29% of total
deposits
Cost of funds remains low at 34
bps as of 3Q16
($ i
n
m
m
)
Note: Average deposit balances
.00%
.10%
.20%
.30%
.40%
.50%
0
200
400
600
800
1,000
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Transaction Deposit Accounts
Interest-bearing Noninterest-bearing Cost of Funds($ in mm)
Deposit Regi 2012 % 2013 % 2014 % 2015 % 2016 YTD %
Atlanta 870 40% 798 38% 869 40% 1,080 39% 1,138 40%
Middle Georgia 1,296 60% 1,309 62% 1,297 60% 1,271 46% 1,311 46%
Augusta - - - - - - 422 15% 415 15%
Total Deposits $2,166 $2,107 $2,166 $2,773 $2,865
18
0
125
250
375
500
500
1,000
1,500
2,000
2,500
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Total Loan Portfolio
Organic PNCI PCI New Loan Fundings
Loan Portfolio
To
ta
l L
o
an
s
($
in
m
m
)
1 New loan fundings include new loans funded and net loan advances on existing commitments
1
New loan originations in
excess of $390mm, offset
by record level of
paydowns
Organic and PNCI loans
increased $8.9mm in the
quarter and $239mm year-
over-year to end 3Q16 at
$2.2B
N
ew
Lo
an
Fu
n
d
in
gs ($ i
n
m
m
)
($ in mm)
Loan Composition 2012 2013 2014 2015 3Q16
Construction, land & land development $230 $251 $313 $501 $496
Other commercial real estate 458 550 636 736 803
Total commercial real estate 688 802 949 1,236 1,299
Residential real estate 43 67 135 210 196
Owner-occupied real estate 172 175 212 281 292
C&I and Leases 74 71 123 267 391
Consumer 8 9 9 21 41
Total Organic & PNCI Loans 986 1,123 1,428 2,015 2,220
PCI Loans 475 257 206 146 127
Total Loans $1,460 $1,381 $1,635 $2,160 $2,346
19
Loan Portfolio and CRE Composition
1 Organic and PNCI loans as of 9/30/16
Commercial Real Estate Composition
Significant industry, client, source of
repayment, and geographic diversity in
the CRE portfolio
Construction, land & land development
(AD&C) comprises both commercial and
residential construction, which make up
16% and 12%, respectively, of total CRE
CRE
36%
AD&C
22%
SFR
9%
OORE
13%
C&I
14%
Leases
4%
Consumer
2%
Loan Portfolio
1
($ in mm) Organic PNCI Total % of Total CRE
CRE
Retail $181 $22 $203 16%
Office 139 7 146 11%
Multifamily 119 9 128 10%
Hospitality 104 5 108 8%
Industrial 73 7 81 6%
Farmland 27 - 27 2%
Sr. Housing 23 4 26 2%
Mini Storage 21 3 23 2%
Restaurant 21 1 21 2%
C-Store 18 0 18 1%
Other 19 1 20 2%
Total $744 $58 $803 62%
Construction, Land & Land Development
Commercial Construction $201 - $201 16%
Residential Construction 152 0 153 12%
Land & Development 133 $10 142 11%
Total $486 $10 $496 38%
Total Commercial Real Estate $1,231 $68 $1,299