Yadkin Valley Financial Corporation (NASDAQ: YAVY)
Fourth Quarter Highlights:
- The Company successfully executed its announced accelerated
asset disposition plan, using the proceeds of the capital raise
announced last quarter.
- As a result of the asset disposition plan, nonperforming loans
decreased $34.2 million to $22.8 million, or 1.71% of total loans,
down from 4.12% at September 30, 2012 and nonperforming assets
decreased $47.8 million to $31.6 million, or 1.64% of total assets,
down from 4.13% at September 30, 2012.
- The ratio of loan loss reserve to nonperforming loans, a key
credit quality indicator, increased to 110.22% in the fourth
quarter of 2012, as compared to 47.73% in the prior quarter.
- Adversely classified loans decreased $47.2 million to $49.8
million at December 31, 2012 as compared to $97.1 million at
September 30, 2012. The ratio of adversely classified assets to
Tier 1 capital and the loan loss reserve was 29.79% at the end of
the fourth quarter, down from 60.07% at the end of the third
quarter of 2012.
- Net loss to common shareholders for the fourth quarter of 2012
was $25.3 million, or $1.21 per diluted share. The increased loss
is due primarily to credit loss from the announced asset
disposition plan carried out in the fourth quarter.
- Cost of deposits continued to decrease, down to 0.84% from
0.91% in the third quarter of 2012. Core deposits now represent
55.1% of total deposits, up from 52.2% last quarter as our mix
shows further improvement.
- As of December 31, 2012, the Company's leverage ratio, Tier 1
risk-based capital ratio, and total risk-based capital ratio were
9.2%, 12.1%, and 13.3%, respectively. In addition, our tangible
common equity to total tangible assets ratio was 7.30% at the end
of the fourth quarter, compared to 5.44% at the end of the third
quarter of 2012.
2012 Highlights:
- Net loss to common shareholders for the full year 2012 was
$12.6 million, or $0.64 per diluted share.
- Year over year, the Bank has shown dramatic improvements in
credit quality due to management's prudent decisions regarding
problem asset disposition.
- Capital ratios have improved significantly year over year due
to capital preservation efforts by the Company in addition to $45
million in new capital raised during the fourth quarter of
2012.
- Core deposits increased $42.9 million, or 5.01%, in 2012, and
core deposits now represent 55.1% of total deposits, as compared to
49.4% at December 31, 2011.
Yadkin Valley Financial Corporation (NASDAQ: YAVY), the holding
company for Yadkin Valley Bank and Trust Company, announced today
financial results for the fourth quarter and full year ended
December 31, 2012. Net loss to common shareholders for the quarter
was $25.3 million, or $1.21 per diluted share, compared to net loss
of $81,000, or $0.00 per diluted share, in the third quarter of
2012, and net income of $2.2 million, or $0.11 per diluted share,
in the fourth quarter of 2011. Net loss to common shareholders for
the year was $12.6 million, or $0.64 per diluted share, compared to
net loss of $17.4 million or $0.95 per diluted share in 2011.
Joe Towell, President and CEO of Yadkin Valley Financial,
commented, "As we outlined our accelerated asset disposition plan
last quarter, we have executed our plan using the proceeds from our
capital raise. We have successfully sold $49 million in problem
loans and other real estate owned as of December 31, 2012, and we
have taken additional write downs of $14 million. We achieved our
internal goals relative to the reductions we took on these assets
and the prices at which they were sold. This asset disposition
yields dramatically improved credit metrics, with our nonperforming
assets to total assets ratio dropping to 1.64%, down from 4.13% in
the third quarter.
"For the fourth quarter, we are very pleased to report that we
have lowered our cost of deposits to 0.84%, down from 0.91% in the
prior quarter. However, the rate environment continues to
negatively impact our margin. Despite that, our net interest income
is in a position to improve over the next several quarters due to
the disposition of many non-earning assets during the fourth
quarter and our redeployment of funds into earning assets.
"2012 was a breakthrough year in the life of our Company as we
worked through TARP, a capital raise, and improving the quality of
our balance sheet. While we took larger charge-offs in the fourth
quarter, we are pleased with the success we've had with our
accelerated asset disposition. As we look toward 2013, we believe
our future has great potential for increased profitability as we
serve our customers throughout the Carolinas."
Fourth Quarter 2012 Financial
Highlights
Asset Quality
The Bank's key asset quality metrics are vastly improved
compared to the prior quarter due to the successful execution of
the asset disposition plan announced last quarter. First,
nonperforming loans decreased for the fifth consecutive quarter,
down $34.2 million to $22.8 million in the fourth quarter of 2012
from $57.1 million at September 30, 2012. In addition, our
adversely classified loans, which include substandard,
substandard-impaired, and doubtful loans, decreased $47.2 million
compared to the third quarter of 2012.
Nonperforming Loan Analysis
(Dollars in thousands)
----------------------------------------------
December 31, 2012 September 30, 2012
---------------------- ----------------------
% of % of
Outstanding Total Outstanding Total
Loan Type Balance Loans Balance Loans
----------- ---------- ----------- ----------
Construction/land
development $ 4,636 0.35% $ 12,785 0.92%
Residential construction 2,749 0.21% 3,712 0.27%
HELOC 1,041 0.08% 3,950 0.29%
1-4 Family residential 3,123 0.23% 6,370 0.46%
Commercial real estate 8,023 0.60% 21,420 1.54%
Commercial & industrial 2,790 0.21% 8,293 0.60%
Consumer & other 455 0.03% 523 0.04%
----------- ---------- ----------- ----------
Total $ 22,817 1.71% $ 57,053 4.12%
----------- ---------- ----------- ----------
Other real estate owned (OREO) totaled $8.7 million at December
31, 2012, a decrease of $13.6 million compared to $22.3 million at
September 30, 2012. As part of our asset disposition plan,
approximately 59 OREO properties were marked to our best estimate
of an exit price at December 31, 2012 in anticipation of including
these properties in a public auction during the first quarter of
2013. The decrease in total OREO in the fourth quarter is due to
$6.1 million in sales for the quarter and taking the write downs,
and we do not expect further significant loss following the
completion of the auction. Total nonperforming assets at December
31, 2012 were $31.6 million, or 1.64% of total assets, a decrease
of $47.8 million from September 30, 2012, due to the accelerated
decrease in nonperforming loans and OREO balances.
During the fourth quarter of 2012, the provision for loan losses
was $31.6 million, an increase of $27.3 million from the third
quarter of 2012. The increase in provision was driven by the
increase in credit losses for the quarter due to the execution of
the accelerated nonperforming loan disposition plan. Total net
charge-offs for the fourth quarter of 2012 were $33.6 million, or
9.74% of average loans on an annualized basis.
At December 31, 2012, the allowance for loan losses was $25.1
million, compared to $27.2 million at September 30, 2012. As a
percentage of total loans held-for-investment, the allowance for
loan losses was 1.92% in the fourth quarter of 2012, down from
2.00% in the third quarter of 2012. The reserve remains at a
conservative level due to continued economic uncertainty and other
external factors in our markets. Out of the $25.1 million in total
allowance for loan losses at December 31, 2012, the specific
allowance for impaired loans accounted for $1.4 million, down from
$3.7 million in the third quarter. The remaining general allowance
of $23.7 million attributed to unimpaired loans was up slightly
from $23.5 million at the end of the third quarter.
Net Interest Income and Net Interest
Margin
Net interest income was down quarter over quarter, totaling
$14.7 million for the fourth quarter of 2012. Due to the low rate
environment and the Company's increased cash position at year end
as a result of the asset sale, the net interest margin experienced
compression, ending the quarter at 3.28%. We expect improvement in
both net interest income and the net interest margin in coming
quarters due to the elimination of nonperforming assets during the
fourth quarter of 2012, the deployment of excess liquidity on the
balance sheet, the repricing of our time deposits, and our
continued shift in deposit mix.
In the fourth quarter of 2012, we continued to strategically
shift our deposit mix and lower our cost of deposits. Core deposits
now represent 55.1% of total deposits, our highest percentage in
the last eight quarters, as we focus on core deposit growth. As a
result of this strategy, our cost of deposits decreased to 0.84%
for the quarter as compared to 0.91% in the third quarter of
2012.
Non-Interest Income
Non-interest income decreased $3.7 million to $986,000 compared
to $4.7 million in the third quarter of 2012. This significant
decrease is due primarily to the $2.1 million loss on sale of loans
recorded as a result of the asset disposition plan and the $1.0
million loss on sale of subsidiary related to the Company's sale of
its mortgage reinsurance line of business. However, income from
fees increased 15.1% and income from service charges increased
5.98%, both compared to the prior quarter.
Non-Interest Expense
Non-interest expense increased in the fourth quarter to $22.7
million as compared to $14.8 million in the third quarter of 2012.
This increase was due to increased cost of OREO because of the
write downs taken on OREO properties to our best estimation of an
exit price in anticipation of an auction of these properties in the
first quarter of 2013.
Balance Sheet and Capital
Total assets increased $3.1 million during the fourth quarter of
2012 as the Company's balance sheet began to stabilize. Gross loans
held-for-investment decreased $49.4 million compared to the third
quarter of 2012, due to the loans sold through our accelerated
asset disposition plan. Excluding these loan sales, our gross loans
decreased slightly quarter over quarter, as we continue to
implement a more aggressive business acquisition strategy. Total
deposits decreased $19.8 million, which primarily consists of
higher-cost time deposits, as our core deposits increased $35.7
million compared to the prior quarter.
The Company's capital ratios have strengthened and continue to
exceed all regulatory requirements. As of December 31, 2012, the
Bank's leverage ratio, Tier 1 risk-based capital ratio, and total
risk-based capital ratio were 8.9%, 11.7%, and 13.0%, respectively.
Leverage ratio, Tier 1 risk-based capital ratio, and total
risk-based capital ratio were 9.2%, 12.1%, and 13.3% respectively,
for the holding company as of December 31, 2012. In addition, the
Company's tangible common equity to total tangible assets ratio was
7.30% at the end of the fourth quarter. For capital adequacy
purposes, leverage ratio, Tier 1 risk-based capital ratio, and
total risk-based capital ratio must be in excess of 5.00%, 6.00%,
and 10.00%, respectively, to be considered well-capitalized.
Regulatory capital ratios for the Company improved this quarter
primarily due to increased capital levels from the Company's
capital raise during the fourth quarter of 2012.
Conference Call
Yadkin Valley Financial Corporation will host a conference call
at 10:00 a.m. EST on Thursday, January 24, 2013 to discuss
financial results, business highlights, and outlook. The call may
be accessed by dialing 877-359-3650 at least 10 minutes prior to
the call. A webcast of the call audio may be accessed at
http://investor.shareholder.com/media/eventdetail.cfm?eventid=124449&CompanyID=YAVY&e=1&mediaKey=C0BD0B7D7BA30A3E46A5C745FA0F7F34.
A replay of the call will be available until January 31, 2013 by
dialing 855-859-2056 or 404-537-3406 and entering Conference ID
91530348.
About Yadkin Valley Financial Corporation
Yadkin Valley Financial Corporation is the holding company for
Yadkin Valley Bank and Trust Company, a full-service community bank
providing services in 34 branches throughout its two regions in
North Carolina and South Carolina. The Western Region serves Avery,
Watauga, Ashe, Surry, Wilkes, Yadkin, and Iredell Counties. The
Southern Region serves Durham, Orange, Granville, Mecklenburg, and
Union Counties in North Carolina, and Cherokee and York Counties in
South Carolina. The Bank provides mortgage lending services through
its mortgage division, Yadkin Valley Mortgage, headquartered in
Greensboro, NC. Securities brokerage services are provided by Main
Street Investment Services, Inc., a Bank subsidiary with four
offices located in the branch network. Yadkin Valley Financial
Corporation's website is www.yadkinvalleybank.com. Yadkin Valley
shares are traded on NASDAQ under the symbol YAVY.
SAFE HARBOR
This news release contains forward-looking statements, as
defined by Federal Securities Laws, including statements about
financial outlook and business environment. Forward looking
statements generally include words such as "expects," "projects,"
"anticipates," "believes," "intends," "estimates," "strategy,"
"plan," "potential," "possible" and other similar expressions.
These statements are provided to assist in the understanding of
future financial performance and such performance involves risks
and uncertainties that may cause actual results to differ
materially from those anticipated in such statements. Any such
statements are based on current expectations and involve a number
of risks and uncertainties. For a discussion of some factors that
may cause such forward-looking statements to differ materially from
actual results, please refer to the section entitled
"Forward-Looking Statements" on pages 45-47 of Yadkin Valley
Financial Corporation's quarterly report filed on Form 10-Q with
the SEC for the quarter ended September 30, 2012 and in the
sections entitled "Risk Factors" in quarterly reports filed on Form
10-Q for the quarters ended September 30, 2012, June 30, 2012 and
March 31, 2012, annual report filed on Form 10-K for the year ended
December 31, 2011, and, once available, the annual report filed on
Form 10-K for the year ended December 31, 2012. Additional factors
that may cause our forward-looking statements to differ materially
from actual results include, without limitation: (1) the
shareholder approvals required for the Private Placement may not be
obtained or may not be obtained on the schedule that we anticipate;
(2) other closing conditions for the Private Placement may not be
satisfied; (3) we may not successfully negotiate and enter into
definitive agreements with respect to, and close the, asset sales
or accelerated foreclosed properties dispositions under the Asset
Disposition Plan; and (4) the asset sales or accelerated foreclosed
properties dispositions may not occur within our currently expected
ranges for price and other terms, and the pre-tax charges
associated with such sales may exceed the pre-tax charges that we
currently anticipate. Forward-looking statements speak only as of
the date they are made, and we undertake no obligation to update or
revise forward-looking statements.
Yadkin Valley Financial Corporation
Consolidated Balance Sheets (Unaudited)
(Amounts in thousands except share and per share data)
December September
31, 30, June 30 March 31, December 31,
2012 2012 2012 2012 2011 (a)
----------- ------------ ----------- ----------- ------------
Assets:
Cash and due
from banks $ 36,125 $ 26,048 $ 25,642 $ 36,478 $ 40,790
Federal funds
sold 50 50 50 50 50
Interest-
earning
deposits with
banks 102,221 97,124 75,895 67,443 52,078
U.S.
government
agencies 27,527 32,869 23,058 23,433 23,726
Mortgage-
backed
securities 230,894 221,806 248,674 263,230 232,494
State and
municipal
securities 84,567 54,769 66,607 72,751 73,118
Common and
preferred
stocks 132 1,112 1,133 1,111 1,084
----------- ------------ ----------- ----------- ------------
Total
investment
securities 343,120 310,556 339,472 360,525 330,422
Construction
loans 131,981 147,408 189,840 196,991 202,803
Commercial,
financial and
other loans 193,810 190,294 189,245 187,037 200,750
Residential
mortgages 140,931 174,728 167,774 166,563 179,047
Commercial
real estate
loans 617,468 615,733 594,798 605,539 631,639
Installment
loans 33,426 34,216 34,177 34,926 35,465
Revolving 1-4
family loans 191,888 196,489 196,547 196,818 201,220
----------- ------------ ----------- ----------- ------------
Total Loans 1,309,504 1,358,868 1,372,381 1,387,874 1,450,924
Allowance for
loan losses (25,149) (27,231) (28,797) (30,062) (32,848)
----------- ------------ ----------- ----------- ------------
Net loans 1,284,355 1,331,637 1,343,584 1,357,812 1,418,076
Loans held for
sale 27,679 24,766 24,867 20,548 19,534
Accrued
interest
receivable 6,376 6,229 6,512 6,932 6,745
Bank premises
and equipment 41,849 41,460 41,547 41,861 42,120
Foreclosed
real estate 8,738 22,294 25,573 28,751 24,966
Non-marketable
equity
securities at
cost 4,154 4,155 4,630 6,130 6,130
Investment in
bank-owned
life
insurance 26,433 26,274 26,114 26,091 25,934
Core deposit
intangible 2,653 2,914 3,180 3,455 3,733
Other assets 39,685 26,871 28,273 20,530 22,610
----------- ------------ ----------- ----------- ------------
Total assets $ 1,923,438 $ 1,920,378 $ 1,945,339 $ 1,976,606 $ 1,993,188
=========== ============ =========== =========== ============
Liabilities
and
shareholders'
equity:
Deposits:
Non-interest
bearing $ 273,896 $ 256,402 $ 244,191 $ 235,417 $ 229,895
NOW, savings
and money
market
accounts 624,460 606,220 613,051 626,538 625,560
Time
certificates:
$100 or more 316,146 342,356 348,072 356,793 360,388
Other 417,160 446,482 468,049 492,072 515,498
----------- ------------ ----------- ----------- ------------
Total
deposits 1,631,662 1,651,460 1,673,363 1,710,820 1,731,341
Borrowings 105,136 102,299 99,310 105,723 105,539
Accrued
expenses and
other
liabilities 15,846 11,383 18,087 16,571 15,722
----------- ------------ ----------- ----------- ------------
Total
liabilities 1,752,643 1,765,142 1,790,760 1,833,114 1,852,602
Total
shareholders'
equity 170,794 155,236 154,579 143,492 140,586
----------- ------------ ----------- ----------- ------------
Total
liabilities
and
shareholders'
equity $ 1,923,438 $ 1,920,378 $ 1,945,339 $ 1,976,606 $ 1,993,188
=========== ============ =========== =========== ============
Period End
Shares
Outstanding 43,151,646 20,003,688 20,003,688 19,506,188 19,526,188
(a) Derived from audited consolidated financial statements
Yadkin Valley Financial Corporation
Consolidated Income Statements (Unaudited)
Three Months Ended
(Amounts in thousands except share and per share data)
September
December 31 30, June 30, March 31, December 31
2012 2012 2012 2012 2011 (a)
----------- ----------- ----------- ----------- -----------
Interest and
fees on
loans (b) $ 17,338 $ 17,735 $ 17,944 $ 18,939 $ 19,173
Interest on
securities 1,381 1,674 1,754 2,006 1,709
Interest on
federal
funds sold 8 9 8 7 6
Interest-
bearing
deposits 66 28 38 37 71
----------- ----------- ----------- ----------- -----------
Total
interest
income 18,793 19,446 19,744 20,989 20,959
----------- ----------- ----------- ----------- -----------
Time deposits
of $100 or
more 1,346 1,762 1,913 1,992 2,271
Other
deposits 2,132 2,018 2,193 2,370 2,569
Borrowed
funds (b) 570 477 480 735 516
----------- ----------- ----------- ----------- -----------
Total
interest
expense 4,048 4,257 4,586 5,097 5,356
----------- ----------- ----------- ----------- -----------
Net
interest
income 14,745 15,189 15,158 15,892 15,603
Provision for
loan losses 31,554 4,251 2,218 2,351 3,627
----------- ----------- ----------- ----------- -----------
Net interest
income after
provision
for loan
losses (16,809) 10,938 12,940 13,541 11,976
----------- ----------- ----------- ----------- -----------
Non-interest
income
Service
charges on
deposit
accounts
(b) 1,398 1,319 1,325 1,243 1,381
Other
service
fees (b) 986 857 893 895 782
Income on
investment
in bank
owned life
insurance 159 159 157 157 166
Mortgage
banking
activities
(b) 1,448 1,599 1,674 1,139 1,267
Gains on
sale of
securities 96 1,348 300 - 678
Other than
temporary
impairment
of
investments (50) - - - -
Loss on sale
of
subsidiary (1,019) - - - -
Loss on sale
of loans (2,132) (900) - - -
Other 100 283 57 75 140
----------- ----------- ----------- ----------- -----------
Total non-
interest
income 986 4,665 4,406 3,509 4,414
----------- ----------- ----------- ----------- -----------
Non-interest
expense
Salaries and
employee
benefits
(b) 6,935 6,914 6,354 6,110 6,135
Occupancy
and
equipment 1,562 1,794 1,790 1,851 1,781
Printing and
supplies 157 168 151 145 154
Data
processing 447 456 453 387 377
Communication
expense 354 314 354 351 367
Advertising
and
marketing 77 103 100 76 101
Amortization
of core
deposit
intangible 260 266 275 279 282
FDIC
assessment
expense 664 650 659 695 718
Attorney
fees 263 311 150 216 108
Loan
collection
expense (b) 569 211 219 249 287
(Gain) loss
on fixed
assets 153 - (1) (21) 13
Net cost of
operation
of other
real estate
owned 8,136 1,322 2,745 1,228 1,086
Other (b) 3,130 2,283 2,483 2,013 2,267
----------- ----------- ----------- ----------- -----------
Total non-
interest
expense 22,708 14,792 15,732 13,579 13,676
----------- ----------- ----------- ----------- -----------
Income (loss)
before
income taxes (38,531) 811 1,614 3,471 2,714
Provision for
income taxes
(benefit) (14,632) 54 (9,383) - (211)
----------- ----------- ----------- ----------- -----------
Net income
(loss) (23,899) 757 10,997 3,471 2,925
----------- ----------- ----------- ----------- -----------
Preferred
stock
dividend
and
amortizati
on of
preferred
stock
discount 1,419 838 833 821 771
----------- ----------- ----------- ----------- -----------
Net income
(loss)
available to
common
shareholders $ (25,318) $ (81) $ 10,164 $ 2,650 $ 2,154
=========== =========== =========== =========== ===========
Basic $ (1.21) $ (0.00) $ 0.52 $ 0.14 $ 0.11
Diluted $ (1.21) $ (0.00) $ 0.52 $ 0.14 $ 0.11
Weighted
average
number of
shares
outstanding
Basic 20,917,579 19,389,251 19,386,519 19,378,198 19,371,469
Diluted 20,917,579 19,390,253 19,386,519 19,378,198 19,371,469
(a) Derived from audited consolidated financial statements
(b) Certain income and expense amounts have been reclassified based on a
change in our mortgage reporting segment to conform to 2012 presentation.
Yadkin Valley Financial Corporation
(unaudited)
At or For the Three Months Ended
-----------------------------------------------------
December September December
31, 30, June 30, March 31, 31,
2012 2012 2012 2012 2011
--------- --------- --------- --------- ---------
Per Share Data:
Basic Earnings per
Share $ (1.21) $ 0.00 $ 0.52 $ 0.14 $ 0.11
Diluted Earnings per
Share (1.21) 0.00 0.52 0.14 0.11
Book Value per Share 3.31 5.36 5.34 4.92 4.77
Selected Performance
Ratios:
Return on Average
Assets (annualized) -5.15% -0.02% 2.08% 0.54% 0.42%
Return on Average
Equity (annualized) -53.53% -0.21% 26.93% 6.48% 6.17%
Net Interest Margin
(annualized)(7) 3.28% 3.37% 3.39% 3.54% 3.16%
Net Interest Spread
(annualized)(7) 3.08% 3.19% 3.21% 3.35% 2.98%
Non-interest Income
as a % of
Revenue(6)(7) -13.54% 29.90% 25.55% 20.73% 32.14%
Non-interest Income
as a % of Average
Assets (7) 0.10% 0.24% 0.23% 0.18% 0.26%
Non-interest Expense
as a % of Average
Assets (7) 1.22% 0.76% 0.81% 0.69% 0.68%
Asset Quality:
Loans 30-89 days past
due (000's) (4) $ 14,000 $ 13,354 $ 10,321 $ 10,245 $ 25,888
Loans over 90 days
past due still
accruing (000's) - - - - -
Nonperforming Loans
(000's) 22,817 57,053 63,305 66,088 70,355
Other Real Estate
Owned (000's) 8,738 22,294 25,573 28,751 24,966
Nonperforming Assets
(000's)(5) 31,555 79,347 88,878 94,839 95,321
Accruing/Performing
troubled debt
restructurings
(000's) 17,667 13,929 12,596 15,259 17,173
Nonperforming Loans
to Total Loans 1.71% 4.12% 4.53% 4.69% 4.78%
Nonperforming Assets
to Total Assets 1.64% 4.13% 4.57% 4.80% 4.78%
Allowance for Loan
Losses to Total
Loans 1.88% 1.97% 2.06% 2.13% 2.23%
Allowance for Loan
Losses to Total
Loans Held for
Investment 1.92% 2.00% 2.10% 2.17% 2.26%
Allowance for Loan
Losses to
Nonperforming Loans 110.22% 47.73% 45.49% 45.49% 47.31%
Net Charge-
offs/Recoveries to
Average Loans
(annualized) 9.74% 1.66% 0.99% 1.44% 1.20%
Capital Ratios:
Equity to Total
Assets 8.88% 8.08% 7.95% 7.26% 7.05%
Tier 1 leverage
ratio(1) 8.92% 8.73% 8.55% 8.30% 7.99%
Tier 1 risk-based
ratio(1) 11.73% 11.18% 10.89% 10.61% 10.23%
Total risk-based
capital ratio(1) 12.99% 12.44% 12.15% 11.87% 11.49%
Non-GAAP
disclosures(2):
Tangible Book Value
per Share $ 3.25 $ 5.21 $ 5.18 $ 4.74 $ 4.58
Return on Tangible
Equity (annualized)
(3) -54.34% -0.21% 27.54% 6.63% 6.34%
Tangible Common
Equity to Tangible
Assets (3) 7.30% 5.44% 5.33% 4.69% 4.50%
Efficiency Ratio (7) 138.07% 72.21% 77.92% 67.59% 66.26%
Notes:
(1) Tier 1 leverage, Tier 1 risk-based, and Total risk-based ratios are
ratios for the bank, Yadkin Valley Bank and Trust Company as reported on
Consolidated Reports of Condition and Income for a Bank With Domestic
Offices Only - FFIEC 041.
(2) Management uses these non-GAAP financial measures because it believes
they are useful for evaluating our operations and performance over periods
of time, as well as in managing and evaluating our business and in
discussions about our operations and performance. Management believes
these non-GAAP financial measures provide users of our financial
information with a meaningful measure for assessing our financial results
and credit trends, as well as comparison to financial results for prior
periods. These non-GAAP financial measures should not be considered as a
substitute for operating results determined in accordance with GAAP and
may not be comparable to other similarly titled financial measures used by
other companies.
(3) Tangible Common Equity is the difference of shareholders' equity less
preferred shares and core deposit intangibles. Tangible Assets are the
difference of total assets less core deposit intangibles.
(4) Past due numbers exclude loans classified as nonperforming.
(5) Nonperforming assets exclude accruing troubled debt restructured loans.
(6) Ratio is calculated by taking non-interest income as a percentage of
net interest income after provision for loan losses plus total non-
interest income.
(7) Certain income and expense amounts in the current and prior periods
have been reclassified based on a change in our mortgage reporting
segment.
Yadkin Valley Financial Corporation
Average Balance Sheets and Net Interest Income Analysis (Unaudited)
Three Months Ended December 31,
--------------------------------------------------------
2012 2011
------------------------- -------------------------
(Dollars in Thousands)
Yield Yield
Average / Average /
Balance Interest Rate Balance Interest Rate
---------- -------- ----- ---------- -------- -----
INTEREST
EARNING
ASSETS
Total loans
(1,2) $1,369,884 $ 17,367 5.04% (8) $1,480,509 $ 19,224 5.15% (8)
Investment
securities 325,578 1,599 1.95% 313,760 1,959 2.48%
Interest-
bearing
deposits &
federal funds
sold 124,947 74 0.23% 111,936 78 0.28%
---------- -------- ---------- --------
Total average
earning
assets (1) 1,820,409 19,040 4.16% (6) 1,906,205 21,261 4.43% (6)
-------- --------
Noninterest
earning
assets 128,390 123,655
---------- ----------
Total average
assets $1,948,799 $2,029,860
========== ==========
INTEREST
BEARING
LIABILITIES
Time deposits $ 766,695 3,203 1.66% $ 917,019 4,286 1.85%
Other deposits 615,040 274 0.18% 618,461 554 0.36%
Borrowed funds 104,320 570 2.17% 110,758 504 1.81%
---------- -------- ---------- --------
Total interest
bearing
liabilities 1,486,055 4,047 1.08% (7) 1,646,238 5,344 1.29% (7)
Noninterest
bearing
deposits 263,871 228,398
Other
liabilities 11,209 16,653
---------- ----------
Total average
liabilities 1,761,135 1,891,289
---------- ----------
Shareholders'
equity 187,664 138,571
---------- ----------
Total average
liabilities
and
shareholders'
equity $1,948,799 $2,029,860
========== ==========
NET INTEREST
INCOME/YIELD
(3,4) $ 14,993 3.28% (8) $ 15,917 3.31% (8)
======== ========
INTEREST
SPREAD (5) 3.08% (8) 3.14% (8)
(1) Yields related to securities and loans exempt from Federal income taxes
are stated on a fully tax-equivalent basis, assuming a Federal income tax
rate of 35%, reduced by the nondeductible portion of interest expense.
(2) The loan average includes loans on which accrual of interest has been
discontinued.
(3) Net interest income is the difference between income from earning
assets and interest expense.
(4) Net interest yield is net interest income divided by total average
earning assets.
(5) Interest spread is the difference between the average interest rate
received on earning assets and the average rate paid on interest bearing
liabilities.
(6) Interest income for 2012 and 2011 includes $95,000 and $78,000,
respectively, of accretion for purchase accounting adjustments related to
loans acquired in the merger with American Community.
(7) Interest expense for 2012 and 2011 includes $43,000 and $101,000,
respectively, of accretion for purchase accounting adjustments related to
deposits and borrowings acquired in the merger with American Community.
(8) Certain income and expense amounts have been reclassified based on a
change in our mortgage reporting segment.
Yadkin Valley Financial Corporation
Average Balance Sheets and Net Interest Income Analysis (Unaudited)
Year Ended December 31,
--------------------------------------------------------
2012 2011
------------------------- -------------------------
(Dollars in Thousands)
Yield Yield
Average / Average /
Balance Interest Rate Balance Interest Rate
---------- -------- ----- ---------- -------- -----
INTEREST
EARNING
ASSETS
Total loans
(1,2) $1,399,590 72,093 5.15% (8) $1,534,929 $ 80,800 5.26% (8)
Investment
securities 343,137 7,761 2.26% 309,199 9,226 2.98%
Interest-
bearing
deposits &
federal funds
sold 81,748 201 0.25% 141,249 376 0.27%
---------- -------- ---------- --------
Total average
earning
assets (1) 1,824,475 80,055 4.39% (6) 1,985,377 $ 90,402 4.55%
-------- --------
Noninterest
earning
assets 125,114 142,193
---------- ----------
Total average
assets $1,949,589 2,127,570
========== ==========
INTEREST
BEARING
LIABILITIES
Time deposits 813,035 14,176 1.74% $1,025,165 $ 20,475 2.00%
Other deposits 617,724 1,550 0.25% 610,620 3,400 0.56%
Borrowed funds 102,895 2,262 2.20% 107,725 2,098 1.95%
---------- -------- ---------- --------
Total interest
bearing
liabilities 1,533,654 17,988 1.17% (7) $1,743,510 25,973 1.49%
Noninterest
bearing
deposits 244,137 224,280
Other
liabilities 14,666 16,617
---------- ----------
Total average
liabilities 1,792,457 1,984,407
---------- ----------
Shareholders'
equity 157,132 143,163
---------- ----------
Total average
liabilities
and
shareholders'
equity $1,949,589 $2,127,570
-------- --------
NET INTEREST
INCOME/YIELD
(3,4) $ 62,067 3.40% (8) $ 64,429 3.25% (8)
======== ========
INTEREST
SPREAD (5) 3.21% (8) 3.06% (8)
(1) Yields related to securities and loans exempt from Federal income taxes
are stated on a fully tax-equivalent basis, assuming a Federal income tax
rate of 35%, reduced by the nondeductible portion of interest expense.
(2) The loan average includes loans on which accrual of interest has been
discontinued.
(3) Net interest income is the difference between income from earning
assets and interest expense.
(4) Net interest yield is net interest income divided by total average
earning assets.
(5) Interest spread is the difference between the average interest rate
received on earning assets and the average rate paid on interest bearing
liabilities.
(6) Interest income for 2012 and 2011 includes $253,000 and $577,000,
respectively, of accretion for purchase accounting adjustments relatedto
loans acquired in the merger with American Community.
(7) Interest expense for 2012 and 2011 includes $54,000 and $423,000,
respectively, of accretion for purchase accounting adjustments relatedto
deposits and borrowings acquired in the merger with American Community.
(8) Certain income and expense amounts have been reclassified based on a
change in our mortgage reporting segment.
For additional information contact: Joseph H. Towell President
and Chief Executive Officer (704) 768-1133 Email Contact Jan H.
Hollar Executive Vice President and Chief Financial Officer (704)
768-1161 Email Contact
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