STBZ State Bank Financial Corp.. (delisted)

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
(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.

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