LAKE HAVASU CITY, Ariz., Jul 29, 2008 (PrimeNewswire via COMTEX) ----State Bank Corp. (OTCBB:SBAZ), the holding company for Mohave State Bank, announced second quarter 2008 net income of $1.25 million, a decline of $192,000, or 13.4 percent, from the $1.44 million reported for second quarter 2007. Earnings per diluted share were $0.32 compared with $0.37 for the prior-year second quarter, down 13.5 percent. For the first six months of 2008, net income was $2.3 million, or $0.60 per diluted share, compared to first half 2007 earnings of $2.8 million, or $0.73 per diluted share, down 17.9 percent and 17.8 percent, respectively.

Second quarter 2008 highlights include:

   * An increase in second quarter net income of $181,000, or 17.0 percent, from $1.06 million in the first quarter of 2008.
   Earnings per diluted share increased $0.04, or 14.3 percent, from $0.28 in the first quarter of 2008 driven by an improvement
   in net interest income. * A 27 basis point rebound in the second quarter net interest margin to 4.69 percent from its first
   quarter low of 4.42 percent. The margin still remains 29 basis points lower than the year-earlier quarter. * Strong loan growth,
   up $28.8 million, or 11.5 percent, over the past twelve months, and a 4.1 percent increase from the linked quarter, to $279.2
   million at June 30, 2008. Primary growth sectors include residential real estate and commercial real estate. 

President and CEO Ralph Tapscott stated, "Our second quarter results reflect a stabilization of the pricing relationship between assets and liabilities following a series of interest rate cuts that began in 2007. While profits still lag the year-earlier quarter, we are pleased with the rebound in our net interest margin, net interest income and net income compared with the first quarter of this year. We are finding solid opportunities for loan and fee-based growth, but are decidedly conservative in what we choose to pursue. In addition, we originated and sold $3.7 million of SBA and USDA loans, which contributed to our noninterest income gains."

The returns on average assets and equity for the second quarter of 2008 were 1.40 percent and 13.78 percent, respectively, compared with 1.21 percent and 11.91 percent for first quarter 2008 and 1.63 percent and 17.68 percent for the year-ago quarter.

Results from Operations

Total revenue, consisting of net interest income and noninterest income, was $4.45 million for the second quarter 2008, down $210,000, or 4.5 percent, from the second quarter of 2007. Year over year, net interest income decreased $223,000, or 5.4 percent, to $3.9 million, reflecting a 29 basis point decline in the net interest margin to 4.69 percent, partially offset by a $1.6 million increase in average earning assets. On a linked quarter basis, total revenue increased $337,000, or 8.2 percent, from $4.11 million in the first quarter of 2008.

Noninterest income for the second quarter of 2008 was $503,000, compared with $490,000 for the year-ago quarter, an increase of $13,000, or 2.7 percent. Service charges on deposits grew by $31,000 from the expansion of product and service offerings and the addition of new customer relationships. "Our goal is to add value through a diversified mix of banking products and services, such as mortgage banking and SBA lending. We had a relatively strong quarter in both of these profit centers," commented Mr. Tapscott.

Noninterest expense for the second quarter of 2008 was $2.36 million, compared with $2.24 million for the prior-year quarter, up $128,000, or 5.7 percent. This increase reflects an investment in infrastructure over the past year, such as opening the new Kingman branch and enhancing our technology capabilities. The 2008 second quarter efficiency ratio was 53.15 percent, compared to 56.34 percent for the linked quarter and 48.00 percent for the year-ago quarter.

Balance Sheet

Total assets were $359.1 million at June 30, 2008, up $14.2 million, or 4.1 percent, from the $344.9 million reported at June 30, 2007. Total loans increased $28.8 million or 11.5 percent year over year, to $279.2 million. Commercial real estate loans (CRE), which totaled $121.3 million or 43.4 percent of the overall loan portfolio at June 30, 2008, continues to be a major growth contributor, up $14.6 million, or 13.7 percent, over the past twelve months. Residential loans, which totaled $43.1 million or 15.4 percent of the loan portfolio at June 30, 2008, grew $16.7 million. Growth in these two loan categories was partially offset by a $5.0 million, or 5.9 percent, decrease in construction and development loans (C&D) to $79.9 million or 28.6 percent of the loan portfolio. Mr. Tapscott noted, "While we have experienced weakening real estate conditions in our markets over the last two years, recent data points suggest that conditions are beginning to stabilize. We nevertheless remain cautious in our loan underwriting and focused principally on relationship lending."

Nonperforming assets at June 30, 2008 were $4.3 million, or 1.20 percent of total assets; there were no nonperforming assets at June 30, 2007. Nonperforming assets consist primarily of one residential development project. Net charge-offs for the second quarter 2008 were $72,000, or 0.11 percent of annualized average loans, compared with net charge-offs of $33,000 (0.05 percent of annualized average loans) for the year-ago quarter. The quarter-end allowance for loan losses was 1.35 percent of total loans, compared with 1.39 percent for prior-year quarter end.

Deposits at June 30, 2008 were $282.1 million, an increase of $9.3 million, or 3.4 percent, from the $272.9 million reported at June 30, 2007. Noninterest-bearing deposits increased $12.5 million, or 20.7 percent over the past twelve months. Growth in noninterest-bearing deposits was partially offset by decreased NOW, Savings, and Time deposits, down $1.9 million, $250,000, and $1.1 million, respectively, over the past twelve months. "Our core deposits remain a large part of our deposit mix and continue to reflect our strong local franchise," commented Mr. Tapscott. "Core deposit levels increased in each of the two last quarters. In addition, we recently joined the CDARS network, a program though which customers can access higher deposit insurance limits."

Shareholder equity increased 9.0 percent to $36.3 million at June 30, 2008 from $33.3 million at June 30, 2007. Mohave State Bank exceeds regulatory standards to qualify as a "well-capitalized" institution at June 30, 2008 with a risk-based capital ratio of 12.81 percent.

Mr. Tapscott concluded, "During these challenging times within the banking industry, we are fortunate that our performance remains positive. The commitment of Mohave State Bank has always been to deliver quality service and competitive financial products within our communities. We value the long-term relationships that we have with our customers and believe this is a source of strength during difficult times."

About the Company

State Bank Corp., headquartered in Lake Havasu City, Arizona, is the parent company of Mohave State Bank, the largest locally-owned bank in Mohave County. Mohave State Bank is a full-service bank providing deposit and loan products, and convenient on-line banking to individuals, businesses and professionals. The Bank was established in October 1991, and the holding company was formed in 2004. The Bank has six full-service branches: two in Lake Havasu City, two in Kingman, one in Bullhead City, and one in Yuma, Arizona. The Company is traded over-the-counter as SBAZ. For further information, please visit the web site: www.mohavestbank.com.

Forward-looking Statements

This press release may include forward-looking statements about State Bank Corp. (the "Company") for which the Company claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the corporation's possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, credit quality of borrowers, operational factors and competition in the geographic and business areas in which the Company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.

   State Bank Corp. Five-Quarter Performance Summary For the Quarter Ended -----------------------------------------------------
   Dollars in thousands 6/30/2008 3/31/2008 12/31/2007 9/30/2007 6/30/2007 ---------------------------------------------------------------------
   Performance Highlights Earnings: Total revenue (Net int. in- come + nonint. income) $ 4,446 $ 4,109 $ 4,382 $ 4,502 $ 4,656
   Net interest income $ 3,943 $ 3,639 $ 3,893 $ 4,049 $ 4,166 Provision for loan losses $ 195 $ 130 $ 65 $ 90 $ 195 Noninterest
   income $ 503 $ 470 $ 489 $ 453 $ 490 Noninterest expense $ 2,363 $ 2,315 $ 2,336 $ 2,253 $ 2,235 Net income $ 1,245 $ 1,064
   $ 1,285 $ 1,463 $ 1,437 Per Share Data: Net income, basic $ 0.32 $ 0.28 $ 0.33 $ 0.38 $ 0.37 Net income before extra- ordinary
   items, diluted $ 0.32 $ 0.28 $ 0.33 $ 0.38 $ 0.37 Net income, diluted $ 0.32 $ 0.28 $ 0.33 $ 0.37 $ 0.37 Cash dividends declared
   $ 0.10 $ 0.10 $ 0.16 $ 0.10 $ 0.10 Book value $ 9.40 $ 9.33 $ 9.09 $ 8.67 $ 8.36 Tangible book value $ 9.40 $ 9.33 $ 9.09
   $ 8.67 $ 8.36 Performance Ratios: Return on average assets 1.40% 1.21% 1.47% 1.70% 1.63% Return on average equity 13.78% 11.91%
   14.74% 17.39% 17.68% Net interest margin, taxable equivalent 4.69% 4.42% 4.73% 4.98% 4.98% Average cost of funds 2.18% 2.71%
   2.91% 3.08% 2.92% Average yield on loans 7.55% 7.70% 8.48% 8.91% 8.87% Efficiency ratio 53.15% 56.34% 53.31% 50.04% 48.00%
   Non-interest income to total revenue 11.31% 11.44% 11.16% 10.06% 10.52% Capital & Liquidity: Total equity to total assets
   (EOP) 10.11% 10.06% 9.84% 9.69% 9.66% Tangible equity to tangible assets 10.11% 10.06% 9.84% 9.69% 9.66% Total loans to total
   deposits 98.94% 97.74% 101.55% 95.69% 91.75% Mohave State Bank ----------------- Regulatory Capital 9.92% 9.85% 9.73% 9.71%
   9.50% Tier 1 Capital 11.57% 11.51% 11.44% 11.88% 11.80% Risk Based Capital 12.81% 12.74% 12.67% 13.13% 13.04% Asset Quality:
   Gross charge- offs $ 108 $ 88 $ 55 $ -- $ 39 Net charge-offs (NCOs) $ 72 $ 88 $ 46 $ (34) $ 33 NCO to average loans, annualized
   0.11% 0.13% 0.07% -0.05% 0.05% Non-accrual loans $ 4,087 $ 4,475 $ 585 $ 252 $ -- Other real estate owned $ 205 $ -- $ --
   $ -- $ -- Repossessed assets $ -- $ -- $ -- $ -- $ -- Non-performing assets (NPAs) $ 4,292 $ 4,475 $ 585 $ 252 $ -- NPAs to
   total assets 1.20% 1.24% 0.16% 0.07% 0.00% Loans more than 90 days past due $ -- $ -- $ -- $ -- $ -- NPAs + 90 days past due
   $ 4,292 $ 4,475 $ 585 $ 252 $ -- NPAs + loans 90 days past due to total assets 1.20% 1.24% 0.16% 0.07% 0.00% Allowance for
   loan losses to total loans 1.35% 1.36% 1.36% 1.41% 1.39% Allowance for loan losses to NPAs 88.05% 81.68% 617.61% 1429.76%
   -- Period End Balances: Assets $ 359,081 $ 359,886 $ 352,236 $ 346,586 $ 344,913 Total Loans (before re- serves) $ 279,155
   $ 268,143 $ 265,298 $ 254,386 $ 250,333 Deposits $ 282,138 $ 274,349 $ 261,256 $ 265,841 $ 272,852 Stockholders' equity $
   36,318 $ 36,202 $ 34,658 $ 33,567 $ 33,307 Common stock market capital- ization $ 71,109 $ 69,164 $ 94,758 $ 93,164 $ 99,223
   Full-time equivalent employees 90 91 92 85 83 Shares out- standing 3,843,754 3,831,819 3,836,351 3,881,844 3,891,085 Average
   Balances: Assets $ 355,081 $ 351,318 $ 349,664 $ 345,045 $ 352,326 Earning assets $ 336,165 $ 329,444 $ 328,981 $ 325,474
   $ 334,601 Total Loans (before reserves) $ 264,493 $ 264,493 $ 260,492 $ 252,455 $ 249,074 Deposits $ 270,768 $ 266,946 $ 277,858
   $ 271,650 $ 278,847 Other borrowings $ 46,640 $ 46,981 $ 41,270 $ 37,446 $ 39,860 Stockholders' equity $ 36,139 $ 35,737 $
   34,873 $ 33,649 $ 32,516 Shares out- standing, basic - wtd 3,842,544 3,831,528 3,863,930 3,884,355 3,897,080 Shares out- standing,
   di- luted - wtd 3,856,640 3,838,528 3,871,383 3,891,808 3,904,533 State Bank Corp. Balance Sheets For the Quarter Ended Qrt/Qrt
   Yr/Yr Dollars in ---------------------------- -------------- thousands 6/30/08 3/31/08 6/30/07 Change --------------------------------------------------
   -------------- Consolidated Balance Sheets Assets Cash and cash equivalents $ 7,275 $ 7,018 $ 4,625 3.7% 57.3% Federal funds
   sold -- 8,000 -100.0% Held for maturity securities 5,498 8,515 14,674 -35.4% -62.5% Available for sale securities 50,188 51,687
   60,684 -2.9% -17.3% -------- -------- -------- Total cash and securities 62,961 75,220 79,983 -16.3% -21.3% Loans held for
   sale, before reserves $ 1,653 $ 523 $ 530 -16.3% 211.9% Gross loans held for investment 277,502 267,620 249,803 3.7% 11.1%
   Loan loss reserve (3,779) (3,655) (3,480) 3.4% 8.6% -------- -------- -------- Total net loans 275,376 264,488 246,853 4.1%
   11.6% Premises and equipment, net $ 10,239 $ 10,367 $ 7,495 -1.2% 36.6% Deferred taxes 1,356 1,082 1,788 25.3% -24.2% Federal
   Home Loan Bank and other stock 1,801 1,698 1,638 6.1% 10.0% Company owned life insurance 4,868 4,821 4,692 1.0% 3.8% Other
   assets 2,480 2,210 2,464 12.2% 0.6% -------- -------- -------- Total Assets $359,081 $359,886 $344,913 -0.2% 4.1% ========
   ======== ======== Liabilities Non interest bearing demand $ 72,833 $ 53,670 $ 60,358 35.7% 20.7% Money market, NOW and savings
   129,745 138,310 131,827 -6.2% -1.6% Time deposits less than $100K 32,819 33,330 33,809 -1.5% -2.9% Time deposits more than
   $100K 46,741 49,039 46,858 -4.7% -0.2% -------- -------- -------- Total Deposits 282,138 274,349 272,852 2.8% 3.4% --------
   -------- -------- Securities sold under repurchase agreements 18,282 27,191 27,196 -32.8% -32.8% Federal Home Loan Bank advances
   20,850 20,490 10,455 1.8% 99.4% -------- -------- -------- Total Debt 39,132 47,681 37,651 -17.9% 3.9% Other Liabilities 1,493
   1,654 1,103 -9.7% 35.4% -------- -------- -------- Total Liabilities 322,763 323,684 311,606 -0.3% 3.6% Shareholders' Equity
   Common stock $ 21,589 $ 21,589 $ 21,399 0.0% 0.9% Accumulated retained earnings 14,642 13,994 12,685 4.6% 15.4% Accumulated
   other compre- hensive loss 87 619 (777) -85.9% -111.2% -------- -------- -------- Total share- holders' equity $ 36,318 $
   36,202 $ 33,307 0.3% 9.0% Total liabilities and shareholders' equity $359,081 $359,886 $344,913 -0.2% 4.1% ======== ========
   ======== State Bank Corp. Income Statements For the Quarter Ended -------------------------------------- Dollars in thousands
   6/30/2008 3/31/2008 6/30/2007 ---------------------------------------------------------------------- Condensed Statements
   of Income Interest income Loans, including fees $ 4,995 $ 5,093 $ 5,522 Securities 669 664 849 Other 10 11 120 -----------
   ----------- ----------- Total interest income 5,674 5,768 6,491 ----------- ----------- ----------- Interest expense Deposits
   1,457 1,802 1,923 Borrowings 274 327 402 ----------- ----------- ----------- Total interest expense 1,731 2,129 2,325 -----------
   ----------- ----------- Net interest income 3,943 3,639 4,166 ----------- ----------- ----------- Provision for loan losses
   195 130 195 ----------- ----------- ----------- Net interest income after loan loss provision 3,748 3,509 3,971 -----------
   ----------- ----------- Noninterest income Service charges on deposits 167 170 136 Mortgage loan fees 17 55 103 Gain/losses
   on sale of loans 264 141 213 Other income 55 104 38 ----------- ----------- ----------- Total noninterest income 503 470 490
   ----------- ----------- ----------- Noninterest expense Salaries and employee benefits 1,250 1,319 1,407 Net occupancy expense
   120 95 66 Equipment expense 78 81 56 Data processing 391 326 307 Director fees & expenses 107 128 109 Insurance 14 14
   12 Marketing & promotion 133 125 105 Professional fees 58 28 47 Office expense 70 75 57 Regulatory assessments 45 40 7
   Other expenses 97 84 62 ----------- ----------- ----------- Total noninterest expense 2,363 2,315 2,235 ----------- -----------
   ----------- Income before income taxes 1,888 1,664 2,226 ----------- ----------- ----------- Income taxes 643 600 789 -----------
   ----------- ----------- Net Income $ 1,245 $ 1,064 $ 1,437 =========== =========== =========== Per Share Data Basic EPS $
   0.32 $ 0.28 $ 0.37 Diluted EPS $ 0.32 $ 0.28 $ 0.37 Average shares outstanding Basic 3,842,544 3,831,528 3,897,080 Effect
   of dilutive stock options 14,096 7,000 7,453 ----------- ----------- ----------- Diluted 3,856,640 3,838,528 3,904,533 -----------
   ----------- ----------- State Bank Corp. Deposit and Loan Mix For the Quarter Ended -------------------------------------------------
   Dollars in thousands 6/30/08 3/31/07 12/31/07 9/30/07 6/30/07 ---------------------------------------------------------------------
   Deposit and Loan Mix Deposit Breakout Non interest bearing demand $ 72,833 $ 53,670 $ 48,966 $ 56,424 $ 60,358 Interest bearing
   NOW 4,292 4,133 4,112 3,608 6,160 Savings 4,195 3,738 3,802 4,041 4,444 Money market 121,258 130,439 123,916 121,411 121,223
   Time deposits less than $100K 32,819 33,330 30,405 32,305 33,809 Time deposits more than $100K 46,741 49,039 50,055 48,052
   46,858 --------- --------- --------- --------- --------- Total deposits $ 282,138 $ 274,349 $ 261,256 $ 265,841 $ 272,852
   Loan Breakout Commercial and industrial $ 33,716 $ 33,100 $ 33,912 $ 30,513 $ 30,973 Real estate - construction 79,881 77,212
   74,917 75,816 84,844 Real estate - residential 43,076 36,891 34,958 30,530 26,415 Real estate - commercial 121,339 119,872
   120,371 116,252 106,694 Consumer 1,762 1,745 1,860 1,976 2,158 --------- --------- --------- --------- --------- Total loans
   $ 279,774 $ 268,820 $ 266,018 $ 255,087 $ 251,084 Less unearned fees and interest 619 677 720 701 751 --------- ---------
   --------- --------- --------- Total loans net of unearned fees and interest $ 279,155 $ 268,143 $ 265,298 $ 254,386 $ 250,333
   Less allowance for loan losses 3,779 3,655 3,613 3,603 3,480 --------- --------- --------- --------- --------- Loans, net
   $ 275,376 $ 264,488 $ 261,685 $ 250,783 $ 246,853 Nonperforming Loans Commercial and industrial $ 8 $ -- $ -- $ -- $ -- Real
   estate - construction 4,284 4,475 585 252 -- Real estate - residential -- -- -- -- -- Real estate - commercial -- -- -- --
   -- Consumer -- -- -- -- -- --------- --------- --------- --------- --------- Total nonperforming loans $ 4,292 $ 4,475 $ 585
   $ 252 $ -- 

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SOURCE: State Bank Corp.

Mohave State Bank Ralph E. Tapscott, President and CEO rtapscott@mohavestbank.com Brian M. Riley, EVP and CFO briley@mohavestbank.com
   (928) 855-0000 

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