STATE BANK FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - STATE BANK FINANCIAL CORP	a8kcoverpage093018.htm

Investor Relations: Sheila Ray 404.239.8684 / sheila.ray@statebt.com

State Bank Financial Corporation Reports Third Quarter 2018 Financial Results


▪	Net income of $18.0 million, or $.46 per diluted share, in the third quarter of 2018


▪	Return on assets of 1.43% and return on equity of 10.76%


▪	Organic and PNCI loan growth of $56 million


▪	Merger-related expenses of $11.0 million in the third quarter of 2018


▪	Received shareholder approval for merger with Cadence Bancorporation

ATLANTA, GA, October 22, 2018 - State Bank Financial Corporation (NASDAQ: STBZ) today announced unaudited financial results for the third quarter of 2018. Net income for the third quarter of 2018 was $18.0 million, compared to $18.8 million in the second quarter of 2018, and $14.4 million in the third quarter of 2017. Fully diluted earnings per share were $.46 in the third quarter of 2018, compared to $.48 in the second quarter of 2018 and $.37 in the third quarter of 2017. The third quarter of 2018 included pre-tax merger-related expenses of $11.0 million.

On September 18, 2018, State Bank’s shareholders approved the pending merger with Cadence Bancorporation. The completion of the merger remains subject to the receipt of certain regulatory approvals and the satisfaction of other customary closing conditions. Shares of restricted stock that vested upon shareholder approval of the merger resulted in $9.8 million of merger-related expense in the quarter. The effective tax rate for the third quarter was 9.30% due to the tax benefit resulting from the vesting of the restricted stock. Merger-related expenses, including the restricted stock vesting and tax adjustments, reduced fully diluted earnings per share by $.14 after-tax.

Joe Evans, Chairman of State Bank Financial, commented, “I am pleased with our strong financial performance in the third quarter and our shareholders’ overwhelming approval of our pending merger with Cadence. Our two banks are highly complementary and I expect the combined entity to produce exceptional results.”

Operating Highlights

Interest income on loans improved to $51.6 million in the third quarter of 2018, a $1.1 million increase from the second quarter of 2018 and a $16.2 million increase from the third quarter of 2017. Net interest income of $58.6 million in the third quarter of 2018 increased from $56.1 million in the second quarter of 2018 and $44.3 million in the third quarter of 2017. Accretion income on loans was $8.2 million in the third quarter of 2018, up from $6.6 million in the second quarter of 2018 and $6.5 million in the third quarter of 2017. Accretion income includes $4.1 million in recovery income during the third quarter of 2018 compared to $2.7 million in the second quarter of 2018 and $2.3 million in the third quarter of 2017.

Noninterest income was $9.7 million in the third quarter of 2018, compared to $10.9 million in the second quarter of 2018 and $9.7 million in the third quarter of 2017. Mortgage banking revenues declined $1.3 million in the third quarter of 2018 compared to the second quarter of 2018. In late September 2018, State Bank announced the transition of the majority of its mortgage employees to another financial institution.

Total noninterest expense for the third quarter of 2018 was $46.3 million, compared to $40.0 million in the second quarter of 2018 and $31.6 million in the third quarter of 2017. The increase was primarily due to $11.0 million in merger-related expenses, of which $9.8 million was related to the vesting of restricted stock in September 2018. Salaries and employee benefit expenses decreased $1.1 million compared to the second quarter of 2018. Total noninterest expense excluding merger-related expenses declined $2.0 million from the second quarter of 2018.

Tom Wiley, Vice Chairman and CEO, commented, “I am proud of our positive operating trends. While the mortgage transition impacted noninterest income during the third quarter, the reduction of associated expenses will measurably improve our efficiency going forward.”

Financial Condition

Total assets at September 30, 2018, were $4.9 billion, down from $5.0 billion at June 30, 2018. Total loans were $3.6 billion at September 30, 2018, up $32.1 million from the second quarter of 2018. Period-end organic loans increased to $2.8 billion at September 30, 2018, an increase of $123.1 million from the second quarter of 2018. Purchased non-credit impaired loans decreased to $725.7 million at September 30, 2018, a $67.3 million linked-quarter decline. Purchased credit impaired loans decreased to $124.8 million at September 30, 2018, a $23.7 million linked-quarter decline.

Past due organic and purchased non-credit impaired loans were .34% and 2.73% of their respective portfolios at September 30, 2018. The increase in past due purchased non-credit impaired loans was due to one relationship that was recorded as nonaccrual in the second quarter of 2018. The provision for loan losses on organic and purchased non-credit impaired loans was $2.1 million in the third quarter of 2018. The organic allowance as a percent of organic loans was .98% at the end of the third quarter of 2018.

Total deposits at September 30, 2018, were $4.2 billion, down $115.8 million from June 30, 2018, although average deposits increased $54.8 million from the second quarter of 2018. Noninterest-bearing demand deposits represented 27.5% of total deposits as of September 30, 2018. Period-end noninterest-bearing demand deposits were $1.2 billion, a $35.5 million decrease, while average noninterest-bearing demand deposits increased $40.9 million from the second quarter of 2018.

Tangible book value per share was $14.70 at the end of the third quarter of 2018. State Bank Financial Corporation continues to be well capitalized, ending the quarter with a leverage ratio of 11.85% and a Tier I risk-based capital ratio of 12.89%.

Detailed Results

Supplemental tables displaying financial results for the third quarter of 2018, the previous four quarters and year-to-date 2018 are included with this press release.

Non-GAAP Financial Measures

This press release contains financial 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 3Q18 Financial Supplement: Table 8, Reconciliation of Non-GAAP Measures.

About State Bank Financial Corporation

State Bank Financial Corporation (NASDAQ: STBZ), with approximately $4.9 billion in consolidated assets as of September 30, 2018, is an Atlanta-based bank holding company for State Bank and Trust Company. State Bank operates a full service banking business and offers a broad range of commercial and retail banking products to our customers throughout seven of Georgia’s eight largest MSAs.

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

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release and other information that we make publicly available from time to time are “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,” “anticipate,” “plan,” “seek,” “believe,” “expect,” “focus,” “strategy,” “future,” “likely,” “project,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements regarding our pending merger with Cadence Bancorporation (“Cadence”) and the impact the transition of our mortgage employees to another financial institution will have on expenses going forward. Such forward-looking statements are subject to risks, uncertainties, and other factors, including a downturn in the economy, particularly in our markets; volatile credit and financial markets both domestic and foreign; potential deterioration in real estate values; regulatory changes and excessive loan losses; the occurrence of any event, change or other circumstances that could give rise to the right of Cadence or us to terminate the definitive merger agreement; the outcome of any legal proceedings that may be instituted against Cadence or us; the failure to obtain the remaining necessary regulatory approvals for our merger with Cadence (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction), or to satisfy any of the other conditions to the merger on a timely basis or at all; the possibility that the anticipated benefits of the merger are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Cadence and State Bank do business; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the merger; Cadence’s ability to complete the acquisition and integration of State Bank successfully; and other factors that may affect ours or Cadence’s future results, as well as additional risks and uncertainties contained in the “Risk Factors” and forward-looking statements disclosure contained in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, 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.



State Bank Financial Corporation
3Q18 Financial Supplement: Table 1
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
													3Q18 change vs
(Dollars in thousands, except per share amounts)	3Q18		2Q18			1Q18		4Q17		3Q17			2Q18			3Q17

Income Statement Highlights
Interest income on loans	$	51,553	$	50,416		$	48,444	$	46,926	$	35,400		$	1,137		$	16,153
Accretion income on loans	8,154		6,595			5,946		10,671		6,520			1,559			1,634
Interest income on invested funds	6,917		6,677			6,171		6,034		5,782			240			1,135
Total interest income	66,624		63,688			60,561		63,631		47,702			2,936			18,922
Interest expense	8,039		7,558			5,705		5,614		3,370			481			4,669
Net interest income	58,585		56,130			54,856		58,017		44,332			2,455			14,253
Provision for loan and lease losses (organic & PNCI loans)	2,100		2,556			2,650		2,050		1,300			(456		)	800
Provision for loan and lease losses (purchased credit impaired loans)	109		(163		)	558		798		(885		)	272			994
Provision for loan and lease losses	2,209		2,393			3,208		2,848		415			(184		)	1,794
Total noninterest income	9,738		10,917			10,461		10,140		9,682			(1,179		)	56
Total noninterest expense	46,318		39,983			39,268		40,684		31,571			6,335			14,747
Income before income taxes	19,796		24,671			22,841		24,625		22,028			(4,875		)	(2,232		)
Income tax expense	1,841		5,904			5,476		19,248		7,592			(4,063		)	(5,751		)
Net income	$	17,955	$	18,767		$	17,365	$	5,377	$	14,436		$	(812	)	$	3,519

Common Share Data
Basic earnings per share	$	.46	$	.48		$	.45	$	.14	$	.37		$	(.02	)	$	.09
Diluted earnings per share	.46		.48			.44		.14		.37			(.02		)	.09
Cash dividends declared per share	.20		.20			.20		.14		.14			—			.06
Book value per share	17.12		16.79			16.58		16.45		16.48			.33			.64
Tangible book value per share (1)	14.70		14.38			14.15		14.00		14.01			.32			.69
Market price per share (quarter end)	30.18		33.40			30.01		29.84		28.65			(3.22		)	1.53

Common Shares Outstanding
Common stock	38,800,431		39,121,749			39,003,412		38,992,163		38,991,022			(321,318		)	(190,591		)
Weighted average shares outstanding:
Basic	38,193,099		38,038,181			38,032,007		38,009,181		37,918,753			154,918			274,346
Diluted	38,211,476		38,075,106			38,070,554		38,068,619		37,963,141			136,370			248,335

Average Balance Sheet Highlights
Loans	$	3,640,532	$	3,662,142		$	3,598,543	$	3,603,482	$	2,893,187		$	(21,610	)	$	747,345
Assets	4,984,791		4,950,453			4,860,730		4,982,451		4,178,731			34,338			806,060
Deposits	4,255,026		4,200,187			4,084,844		4,248,553		3,437,329			54,839			817,697
Equity	662,112		650,919			642,787		645,409		638,620			11,193			23,492
Tangible equity (1)	568,242		556,403			547,620		549,564		550,002			11,839			18,240



State Bank Financial Corporation
3Q18 Financial Supplement: Table 1 (continued)
Condensed Consolidated Financial Summary Results
Quarterly (Unaudited)
											3Q18 change vs
(Dollars in thousands, except per share amounts)	3Q18		2Q18		1Q18		4Q17		3Q17		2Q18		3Q17

Key Metrics (2)
Return on average assets	1.43	%	1.52	%	1.45	%	.43	%	1.37	%	(.09	)%	.06	%
Return on average equity	10.76		11.56		10.96		3.31		8.97		(.80	)	1.79
Yield on earning assets	5.61		5.47		5.36		5.39		4.85		.14		.76
Cost of funds	.75		.71		.55		.52		.38		.04		.37
Rate on interest-bearing liabilities	1.03		.98		.75		.71		.54		.05		.49
Net interest margin	4.93		4.82		4.86		4.91		4.51		.11		.42
Leverage ratio (3)	11.85		11.75		11.69		11.24		13.37		.10		(1.52	)
Tier I risk-based capital ratio (3)	12.89		12.79		12.44		12.61		12.30		.10		.59
Total risk-based capital ratio (3)	13.66		13.53		13.14		13.28		12.91		.13		.75
Efficiency ratio (4)	67.79		59.63		60.12		59.69		58.45		8.16		9.34
Average loans to average deposits	85.56		87.19		88.09		84.82		84.17		(1.63	)	1.39
Noninterest-bearing deposits to total deposits	27.50		27.59		26.04		28.07		27.82		(.09	)	(.32	)

(1) Denotes a non-GAAP financial measure. See Reconciliation of Non-GAAP Measures (Table 8) for further information.

(2) Income statement ratios and yield/rate information are annualized for the applicable period.

(3) Current period capital ratios are estimated as of the date of this earnings release.

(4) Noninterest expense divided by net interest income plus noninterest income.



State Bank Financial Corporation
3Q18 Financial Supplement: Table 2
Condensed Consolidated Balance Sheets
Quarterly (Unaudited)
																3Q18 change vs
(Dollars in thousands)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Assets
Cash and amounts due from depository institutions	$	16,273		$	12,974		$	13,113		$	17,438		$	14,235		$	3,299		$	2,038
Interest-bearing deposits in other financial institutions	186,524			215,360			59,620			211,142			251,115			(28,836		)	(64,591		)
Federal funds sold	5,130			9,957			9,000			2,297			16,889			(4,827		)	(11,759		)
Cash and cash equivalents	207,927			238,291			81,733			230,877			282,239			(30,364		)	(74,312		)
Equity securities	1,515			1,515			1,515			1,515			1,515			—			—
Debt securities available-for-sale	772,369			835,670			863,697			872,455			919,248			(63,301		)	(146,879		)
Debt securities held-to-maturity	13,000			16,742			27,558			32,852			57,867			(3,742		)	(44,867		)
Loans	3,637,334			3,605,273			3,618,521			3,532,193			3,572,790			32,061			64,544
Allowance for loan and lease losses	(34,789		)	(33,335		)	(31,317		)	(28,750		)	(26,842		)	(1,454		)	(7,947		)
Loans, net	3,602,545			3,571,938			3,587,204			3,503,443			3,545,948			30,607			56,597
Loans held-for-sale	30,676			55,096			47,482			36,211			47,743			(24,420		)	(17,067		)
Other real estate owned	5,442			5,012			4,207			895			1,271			430			4,171
Premises and equipment, net	56,007			56,965			52,410			51,794			52,120			(958		)	3,887
Goodwill	84,564			84,564			84,564			84,564			84,564			—			—
Other intangibles, net	9,074			9,729			10,384			11,034			11,755			(655		)	(2,681		)
SBA servicing rights	3,842			3,989			4,003			4,069			3,950			(147		)	(108		)
Bank-owned life insurance	68,772			68,231			67,768			67,313			66,846			541			1,926
Other assets	68,344			64,587			59,772			61,560			73,417			3,757			(5,073		)
Total assets	$	4,924,077		$	5,012,329		$	4,892,297		$	4,958,582		$	5,148,483		$	(88,252	)	$	(224,406	)
Liabilities and Shareholders’ Equity
Noninterest-bearing deposits	$	1,151,511		$	1,187,028		$	1,089,579		$	1,191,106		$	1,179,698		$	(35,517	)	$	(28,187	)
Interest-bearing deposits	3,035,403			3,115,676			3,094,853			3,052,029			3,061,387			(80,273		)	(25,984		)
Total deposits	4,186,914			4,302,704			4,184,432			4,243,135			4,241,085			(115,790		)	(54,171		)
Federal funds purchased and securities sold under agreements to repurchase	33,621			13,525			9,565			25,209			25,499			20,096			8,122
FHLB borrowings	—			—			15,000			—			—			—			—
Notes payable	—			398			398			398			398			(398		)	(398		)
Other liabilities	39,365			38,783			36,248			48,289			238,911			582			(199,546		)
Total liabilities	4,259,900			4,355,410			4,245,643			4,317,031			4,505,893			(95,510		)	(245,993		)
Total shareholders’ equity	664,177			656,919			646,654			641,551			642,590			7,258			21,587
Total liabilities and shareholders’ equity	$	4,924,077		$	5,012,329		$	4,892,297		$	4,958,582		$	5,148,483		$	(88,252	)	$	(224,406	)

Capital Ratios (1)
Average equity to average assets	13.28		%	13.15		%	13.22		%	12.95		%	15.28		%	.13		%	(2.00		)%
Leverage ratio	11.85			11.75			11.69			11.24			13.37			.10			(1.52		)
CET1 risk-based capital ratio	12.89			12.79			12.44			12.61			12.30			.10			.59
Tier I risk-based capital ratio	12.89			12.79			12.44			12.61			12.30			.10			.59
Total risk-based capital ratio	13.66			13.53			13.14			13.28			12.91			.13			.75

(1) Current period capital ratios are estimated as of the date of this earning release.



State Bank Financial Corporation
3Q18 Financial Supplement: Table 3
Condensed Consolidated Income Statements
Quarterly (Unaudited)
																3Q18 change vs
(Dollars in thousands, except per share amounts)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Net Interest Income:
Interest income on loans	$	51,553		$	50,416		$	48,444		$	46,926		$	35,400		$	1,137		$	16,153
Accretion income on loans	8,154			6,595			5,946			10,671			6,520			1,559			1,634
Interest income on invested funds	6,917			6,677			6,171			6,034			5,782			240			1,135
Interest expense	8,039			7,558			5,705			5,614			3,370			481			4,669
Net interest income	58,585			56,130			54,856			58,017			44,332			2,455			14,253
Provision for loan and lease losses (organic & PNCI loans)	2,100			2,556			2,650			2,050			1,300			(456		)	800
Provision for loan and lease losses (purchased credit impaired loans)	109			(163		)	558			798			(885		)	272			994
Provision for loan and lease losses	2,209			2,393			3,208			2,848			415			(184		)	1,794
Net interest income after provision for loan and lease losses	56,376			53,737			51,648			55,169			43,917			2,639			12,459
Noninterest Income:
Service charges on deposits	1,572			1,462			1,625			1,678			1,575			110			(3		)
Mortgage banking income	1,818			3,125			2,925			2,558			2,793			(1,307		)	(975		)
Payroll and insurance income	1,667			1,608			1,760			1,698			1,487			59			180
SBA income	1,401			1,252			1,192			1,866			1,464			149			(63		)
ATM income	909			919			870			860			826			(10		)	83
Bank-owned life insurance income	541			463			455			467			526			78			15
Gain (loss) on sale of investment securities	181			250			—			(1,481		)	3			(69		)	178
Other	1,649			1,838			1,634			2,494			1,008			(189		)	641
Total noninterest income	9,738			10,917			10,461			10,140			9,682			(1,179		)	56
Noninterest Expense:
Salaries and employee benefits	23,166			24,279			26,042			25,089			20,701			(1,113		)	2,465
Occupancy and equipment	3,240			3,421			3,496			3,576			3,187			(181		)	53
Data processing	2,808			2,696			2,896			2,596			2,587			112			221
Legal and professional fees	1,187			967			739			973			700			220			487
Merger-related expenses	10,967			2,601			1,264			2,588			135			8,366			10,832
Marketing	744			940			425			693			342			(196		)	402
Federal deposit insurance premiums and other regulatory fees	528			589			500			498			407			(61		)	121
Loan collection costs and OREO activity	(204		)	(116		)	166			358			181			(88		)	(385		)
Amortization of intangibles	655			654			651			721			701			1			(46		)
Other	3,227			3,952			3,089			3,592			2,630			(725		)	597
Total noninterest expense	46,318			39,983			39,268			40,684			31,571			6,335			14,747
Income Before Income Taxes	19,796			24,671			22,841			24,625			22,028			(4,875		)	(2,232		)
Income tax expense	1,841			5,904			5,476			19,248			7,592			(4,063		)	(5,751		)
Net Income	$	17,955		$	18,767		$	17,365		$	5,377		$	14,436		$	(812	)	$	3,519

Net income allocated to participating securities	$	400		$	509		$	435		$	136		$	389		$	(109	)	$	11
Net income allocated to common shareholders	17,555			18,258			16,930			5,241			14,047			(703		)	3,508

Effective Tax Rate	9.30		%	23.93		%	23.97		%	78.16		%	34.47		%	(14.63		)%	(25.17		)%
Earnings Per Share
Basic	$	.46		$	.48		$	.45		$	.14		$	.37		$	(.02	)	$	.09
Diluted	.46			.48			.44			.14			.37			(.02		)	.09
Weighted Average Shares Outstanding
Basic	38,193,099			38,038,181			38,032,007			38,009,181			37,918,753			154,918			274,346
Diluted	38,211,476			38,075,106			38,070,554			38,068,619			37,963,141			136,370			248,335



State Bank Financial Corporation
3Q18 Financial Supplement: Table 4
Condensed Consolidated Income Statements
Year to Date (Unaudited)

	Nine Months Ended September 30						Change
(Dollars in thousands, except per share amounts)	2018			2017			Change

Net Interest Income:
Interest income on loans	$	150,413		$	104,332		$	46,081
Accretion income on loans	20,695			23,425			(2,730		)
Interest income on invested funds	19,765			16,989			2,776
Interest expense	21,302			9,978			11,324
Net interest income	169,571			134,768			34,803
Provision for loan and lease losses (organic & PNCI loans)	7,306			4,131			3,175
Provision for loan and lease losses (purchased credit impaired loans)	504			(869		)	1,373
Provision for loan and lease losses	7,810			3,262			4,548
Net interest income after provision for loan and lease losses	161,761			131,506			30,255
Noninterest Income:
Service charges on deposits	4,659			4,513			146
Mortgage banking income	7,868			8,783			(915		)
Payroll and insurance income	5,035			4,400			635
SBA income	3,845			4,625			(780		)
ATM income	2,698			2,522			176
Bank-owned life insurance income	1,459			1,475			(16		)
Gain on sale of investment securities	431			28			403
Other	5,121			3,271			1,850
Total noninterest income	31,116			29,617			1,499
Noninterest Expense:
Salaries and employee benefits	73,487			63,267			10,220
Occupancy and equipment	10,157			9,796			361
Data processing	8,400			7,608			792
Legal and professional fees	2,893			3,403			(510		)
Merger-related expenses	14,832			2,742			12,090
Marketing	2,109			1,409			700
Federal deposit insurance premiums and other regulatory fees	1,617			1,202			415
Loan collection costs and OREO activity	(154		)	(1,074		)	920
Amortization of intangibles	1,960			2,094			(134		)
Other	10,268			7,686			2,582
Total noninterest expense	125,569			98,133			27,436
Income Before Income Taxes	67,308			62,990			4,318
Income tax expense	13,221			21,793			(8,572		)
Net Income	$	54,087		$	41,197		$	12,890

Net income allocated to participating securities	$	1,342		$	1,095		$	247
Net income allocated to common shareholders	52,745			40,102			12,643

Earnings Per Share
Basic	$	1.38		$	1.06		$	.32
Diluted	1.38			1.06			.32
Weighted Average Shares Outstanding
Basic	38,088,378			37,894,385			193,993
Diluted	38,110,938			37,943,971			166,967



State Bank Financial Corporation
3Q18 Financial Supplement: Table 5
Condensed Consolidated Composition of Loans and Deposits at Period Ends
Quarterly (Unaudited)
											3Q18 change vs
(Dollars in thousands)	3Q18		2Q18		1Q18		4Q17		3Q17		2Q18			3Q17

Composition of Loans
Organic loans (1):
Construction, land & land development	$	480,530	$	454,625	$	442,942	$	412,540	$	460,368	$	25,905		$	20,162
Other commercial real estate	939,258		947,704		941,581		949,594		915,727		(8,446		)	23,531
Total commercial real estate	1,419,788		1,402,329		1,384,523		1,362,134		1,376,095		17,459			43,693
Residential real estate	238,292		222,886		208,960		196,225		175,258		15,406			63,034
Owner-occupied real estate	275,095		270,053		253,059		260,273		261,784		5,042			13,311
Commercial, financial & agricultural	758,897		666,572		562,566		430,205		363,551		92,325			395,346
Leases	30,410		36,863		43,787		52,396		66,765		(6,453		)	(36,355		)
Consumer	64,361		65,019		62,423		64,610		61,200		(658		)	3,161
Total organic loans	2,786,843		2,663,722		2,515,318		2,365,843		2,304,653		123,121			482,190
Purchased non-credit impaired loans(2):
Construction, land & land development	13,284		14,282		24,352		25,908		30,670		(998		)	(17,386		)
Other commercial real estate	186,556		194,995		226,893		218,660		234,486		(8,439		)	(47,930		)
Total commercial real estate	199,840		209,277		251,245		244,568		265,156		(9,437		)	(65,316		)
Residential real estate	61,141		72,817		82,416		96,529		112,244		(11,676		)	(51,103		)
Owner-occupied real estate	73,466		82,500		94,900		118,294		125,438		(9,034		)	(51,972		)
Commercial, financial & agricultural	390,097		426,992		515,327		529,184		558,992		(36,895		)	(168,895		)
Consumer	1,197		1,503		1,791		2,161		2,647		(306		)	(1,450		)
Total purchased non-credit impaired loans	725,741		793,089		945,679		990,736		1,064,477		(67,348		)	(338,736		)
Purchased credit impaired loans (3):
Construction, land & land development	6,281		13,227		12,802		13,545		16,918		(6,946		)	(10,637		)
Other commercial real estate	60,910		73,607		77,838		86,748		102,934		(12,697		)	(42,024		)
Total commercial real estate	67,191		86,834		90,640		100,293		119,852		(19,643		)	(52,661		)
Residential real estate	30,037		32,087		36,747		40,332		42,190		(2,050		)	(12,153		)
Owner-occupied real estate	17,145		18,019		18,593		20,803		26,210		(874		)	(9,065		)
Commercial, financial & agricultural	10,300		11,440		11,436		14,051		15,139		(1,140		)	(4,839		)
Consumer	77		82		108		135		269		(5		)	(192		)
Total purchased credit impaired loans	124,750		148,462		157,524		175,614		203,660		(23,712		)	(78,910		)
Total loans	$	3,637,334	$	3,605,273	$	3,618,521	$	3,532,193	$	3,572,790	$	32,061		$	64,544
Composition of Deposits
Noninterest-bearing demand deposits	$	1,151,511	$	1,187,028	$	1,089,579	$	1,191,106	$	1,179,698	$	(35,517	)	$	(28,187	)
Interest-bearing transaction accounts	679,599		674,205		633,542		688,150		619,156		5,394			60,443
Savings and money market deposits	1,527,399		1,587,204		1,602,908		1,626,238		1,680,922		(59,805		)	(153,523		)
Time deposits	707,950		698,361		713,869		715,133		731,416		9,589			(23,466		)
Brokered and wholesale time deposits	120,455		155,906		144,534		22,508		29,893		(35,451		)	90,562
Total deposits	$	4,186,914	$	4,302,704	$	4,184,432	$	4,243,135	$	4,241,085	$	(115,790	)	$	(54,171	)

(1) Loans originated by State Bank and Trust Company.

(2) Consists of loans purchased in our acquisitions of Bank of Atlanta, First Bank of Georgia, The National Bank of Georgia, S Bank, and AloStar Bank of Commerce.

(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.



State Bank Financial Corporation
3Q18 Financial Supplement: Table 6
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
																3Q18 change vs
(Dollars in thousands)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17

Allowance for loan and lease losses on organic loans
Beginning Balance	$	26,366		$	24,882		$	24,039		$	22,709		$	22,560		$	1,484		$	3,806
Charge-offs	(326		)	(171		)	(664		)	(474		)	(912		)	(155		)	586
Recoveries	87			70			133			77			106			17			(19		)
Net (charge-offs) recoveries	(239		)	(101		)	(531		)	(397		)	(806		)	(138		)	567
Provision for loan and lease losses	1,300			1,585			1,374			1,727			955			(285		)	345
Ending Balance	$	27,427		$	26,366		$	24,882		$	24,039		$	22,709		$	1,061		$	4,718

Allowance for loan and lease losses on purchased non-credit impaired loans
Beginning Balance	$	2,981		$	2,249		$	995		$	900		$	667		$	732		$	2,314
Charge-offs	(451		)	(285		)	(40		)	(273		)	(152		)	(166		)	(299		)
Recoveries	59			46			18			45			40			13			19
Net (charge-offs) recoveries	(392		)	(239		)	(22		)	(228		)	(112		)	(153		)	(280		)
Provision for loan and lease losses	800			971			1,276			323			345			(171		)	455
Ending Balance	$	3,389		$	2,981		$	2,249		$	995		$	900		$	408		$	2,489

Allowance for loan and lease losses on purchased credit impaired loans
Beginning Balance	$	3,988		$	4,186		$	3,716		$	3,233		$	4,761		$	(198	)	$	(773	)
Charge-offs	(124		)	(35		)	(88		)	(315		)	(643		)	(89		)	519
Recoveries	—			—			—			—			—			—			—
Net (charge-offs) recoveries	(124		)	(35		)	(88		)	(315		)	(643		)	(89		)	519
Provision for loan and lease losses	109			(163		)	558			798			(885		)	272			994
Ending Balance	$	3,973		$	3,988		$	4,186		$	3,716		$	3,233		$	(15	)	$	740

Nonperforming organic assets
Nonaccrual loans	$	10,648		$	8,119		$	9,186		$	6,656		$	5,482		$	2,529		$	5,166
Accruing TDRs	—			490			556			566			—			(490		)	—
Total nonperforming organic loans	10,648			8,609			9,742			7,222			5,482			2,039			5,166
Other real estate owned	3,255			4,135			3,231			153			—			(880		)	3,255
Total nonperforming organic assets	$	13,903		$	12,744		$	12,973		$	7,375		$	5,482		$	1,159		$	8,421

Nonperforming purchased non-credit impaired assets
Nonaccrual loans	$	22,207		$	22,585		$	6,356		$	5,821		$	5,615		$	(378	)	$	16,592
Accruing TDRs	2,756			2,760			2,769			—			—			(4		)	2,756
Total nonperforming PNCI loans	24,963			25,345			9,125			5,821			5,615			(382		)	19,348
Other real estate owned	1,261			—			—			—			—			1,261			1,261
Total nonperforming PNCI assets	$	26,224		$	25,345		$	9,125		$	5,821		$	5,615		$	879		$	20,609

Ratios for organic assets
Annualized QTD charge-offs (recoveries) on organic loans to average organic loans	.03		%	.02		%	.09		%	.07		%	.14		%	.01		%	(.11)		%
Nonperforming organic loans to organic loans	.38			.32			.39			.31			.24			.06			.14
Nonperforming organic assets to organic loans + OREO	.50			.48			.52			.31			.24			.02			.26
Past due organic loans to organic loans	.34			.16			.22			.20			.12			.18			.22
Allowance for loan and lease losses on organic loans to organic loans	.98			.99			.99			1.02			.99			(.01		)	(.01		)



State Bank Financial Corporation
3Q18 Financial Supplement: Table 6 (continued)
Condensed Consolidated Asset Quality Data
Quarterly (Unaudited)
											3Q18 change vs
(Dollars in thousands)	3Q18		2Q18		1Q18		4Q17		3Q17		2Q18		3Q17

Ratios for purchased non-credit impaired loans
Annualized QTD charge-offs (recoveries) on PNCI loans to average PNCI loans	.20	%	.11	%	.01	%	.09	%	.10	%	.09	%	.10	%
Nonperforming PNCI loans to PNCI loans	3.44		3.20		.96		.59		.53		.24		2.91
Nonperforming PNCI assets to PNCI loans + OREO	3.61		3.20		.96		.59		.53		.41		3.08
Past due PNCI loans to PNCI loans	2.73		.36		.45		.40		.48		2.37		2.25
Allowance for loan and lease losses on PNCI loans to PNCI loans	.47		.38		.24		.10		.08		.09		.39

Ratios for purchased credit impaired loans (1)
Annualized QTD charge-offs (recoveries) on PCI loans to average PCI loans	.35	%	.09	%	.21	%	.66	%	1.95	%	.26	%	(1.60)	%
Past due PCI loans to PCI loans	6.68		5.95		6.47		5.84		8.12		.73		(1.44	)
Allowance for loan and lease losses on PCI loans to PCI loans	3.18		2.69		2.66		2.12		1.59		.49		1.59

(1) For each period presented, a portion of our purchased credit impaired loans were contractually past due; however, such delinquencies

were included in our 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, we do not consider purchased credit impaired loans to be nonperforming assets.



State Bank Financial Corporation
3Q18 Financial Supplement: Table 7
Condensed Consolidated Average Balances and Yield Analysis
Quarterly (Unaudited)
																3Q18 change vs
(Dollars in thousands)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18			3Q17
Average Balances
Interest-bearing deposits in other financial institutions and federal funds sold	$	244,697		$	131,506		$	93,692		$	168,223		$	108,546		$	113,191		$	136,151
Investment securities	830,282			880,667			893,685			924,933			913,898			(50,385		)	(83,616		)
Loans, excluding purchased credit impaired (1)	3,499,883			3,507,613			3,430,599			3,413,159			2,762,479			(7,730		)	737,404
Purchased credit impaired loans	140,649			154,529			167,944			190,323			130,708			(13,880		)	9,941
Total earning assets	4,715,511			4,674,315			4,585,920			4,696,638			3,915,631			41,196			799,880
Total nonearning assets	269,280			276,138			274,810			285,813			263,100			(6,858		)	6,180
Total assets	4,984,791			4,950,453			4,860,730			4,982,451			4,178,731			34,338			806,060
Interest-bearing transaction accounts	650,995			627,800			626,298			664,938			580,090			23,195			70,905
Savings & money market deposits	1,570,062			1,568,638			1,594,724			1,685,292			1,383,326			1,424			186,736
Time deposits	704,879			704,850			715,514			724,578			420,192			29			284,687
Brokered and wholesale time deposits	139,270			149,956			65,749			25,911			49,675			(10,686		)	89,595
Other borrowings	23,689			55,344			85,788			35,353			57,988			(31,655		)	(34,299		)
Total interest-bearing liabilities	3,088,895			3,106,588			3,088,073			3,136,072			2,491,271			(17,693		)	597,624
Noninterest-bearing deposits	1,189,820			1,148,943			1,082,559			1,147,834			1,004,046			40,877			185,774
Other liabilities	43,964			44,003			47,311			53,136			44,794			(39		)	(830		)
Shareholders’ equity	662,112			650,919			642,787			645,409			638,620			11,193			23,492
Total liabilities and shareholders' equity	4,984,791			4,950,453			4,860,730			4,982,451			4,178,731			34,338			806,060

Interest Margins (2)
Interest-bearing deposits in other financial institutions and federal funds sold	1.76		%	1.23		%	.80		%	.86		%	.80		%	.53		%	.96		%
Investment securities, tax-equivalent basis	2.79			2.86			2.72			2.43			2.42			(.07		)	.37
Loans, excluding purchased credit impaired, tax-equivalent basis (3)	5.85			5.77			5.73			5.47			5.11			.08			.74
Purchased credit impaired loans	23.00			17.12			14.36			22.24			19.79			5.88			3.21
Total earning assets	5.61		%	5.47		%	5.36		%	5.39		%	4.85		%	.14		%	.76		%
Interest-bearing transaction accounts	.23			.16			.14			.13			.13			.07			.10
Savings & money market deposits	1.13			1.07			.76			.80			.63			.06			.50
Time deposits	1.41			1.25			1.09			1.04			.72			.16			.69
Brokered and wholesale time deposits	1.93			1.87			1.91			1.15			1.05			.06			.88
Other borrowings	.12			1.59			1.31			.52			.75			(1.47		)	(.63		)
Total interest-bearing liabilities	1.03		%	.98		%	.75		%	.71		%	.54		%	.05		%	.49		%
Net interest spread	4.58		%	4.49		%	4.61		%	4.68		%	4.31		%	.09		%	.27		%
Net interest margin	4.93		%	4.82		%	4.86		%	4.91		%	4.51		%	.11		%	.42		%
Net interest margin contribution from accretion income on loans	.69		%	.57		%	.53		%	.90		%	.66		%	.12		%	.03		%

(1) Includes average nonaccrual loans of $32.0 million for 3Q18, $18.9 million for 2Q18, $12.9 million for 1Q18, $11.4 million for 4Q17, and $8.0 million for 3Q17.

(2) Interest income or expense annualized for the applicable period.

(3) Reflects taxable equivalent adjustments using the federal statutory tax rate of 21% for all periods beginning on or after January 1, 2018 and 35% for all periods prior to January 1, 2018 in adjusting tax-exempt loan interest income to a fully taxable basis. The taxable equivalent adjustments included above amount to $28,000 for 3Q18, $6,000 for 2Q18, $57,000 for 1Q18, $128,000 for 4Q17, and $177,000 for 3Q17.



State Bank Financial Corporation
3Q18 Financial Supplement: Table 8
Reconciliation of Non-GAAP Measures (1)
Quarterly (Unaudited)
(dollars in thousands, except per share amounts; taxable equivalent)	3Q18			2Q18			1Q18			4Q17			3Q17

Book value per common share reconciliation
Book value per common share (GAAP)	$	17.12		$	16.79		$	16.58		$	16.45		$	16.48
Effect of goodwill and other intangibles	(2.42		)	(2.41		)	(2.43		)	(2.45		)	(2.47		)
Tangible book value per common share	$	14.70		$	14.38		$	14.15		$	14.00		$	14.01

Average tangible equity reconciliation
Average equity (GAAP)	$	662,112		$	650,919		$	642,787		$	645,409		$	638,620
Effect of average goodwill and other intangibles	(93,870		)	(94,516		)	(95,167		)	(95,845		)	(88,618		)
Average tangible equity	$	568,242		$	556,403		$	547,620		$	549,564		$	550,002

(1)

Certain financial measures included in this press release, tangible book value per common share and average tangible equity, are financial measures that are not recognized by generally accepted accounting principles in the United States, or GAAP. These non-GAAP financial measures exclude the effect of the period end or average balance of intangible assets. Management believes that these non-GAAP financial measures provides additional useful information to investors, particularly since these measure are widely used by industry analysts for companies with prior merger and acquisition activities, such as us.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure is presented in the table above. 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 a substitute for GAAP financial measures, and we strongly encourage 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.

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