ELKIN, NC, Jan. 28, 2010 (Marketwire) --
ELKIN, NC -- (Marketwire) -- 01/28/10 -- Yadkin Valley Financial Corporation (NASDAQ: YAVY)
Fourth Quarter Financial Highlights:
-- Tier 1, total capital, and leverage ratios of 9.16%, 10.43%, and
8.16%, respectively, for the bank
-- Provision for loan losses of $3.1 million, a decrease of $15.1
million compared to the third quarter of 2009
-- Loan loss reserves decreased to 2.82% of total gross loans or 2.90%
of total loans held for investment, compared to 3.21% of total gross loans
or 3.30% of total loans held for investment in the third quarter of 2009
-- Loan loss reserves increased to 134% of nonperforming loans, compared
to 116% of nonperforming loans in the third quarter of 2009
-- Nonperforming loans decreased to 2.10% of total gross loans from
2.75% in the third quarter of 2009
-- Nonperforming assets decreased to 2.39% of total assets from 2.73% in
the third quarter of 2009
-- Net charge-offs decreased to $8.8 million or 2.05% of average loans
on an annualized basis, compared to $10.3 million or 2.39% of average loans
on an annualized basis in the third quarter of 2009
-- Net interest margin was 3.83%, an increase of one basis point
compared to 3.82% in the third quarter
-- Net income available to common shareholders was $3.2 million (after
preferred dividends), or $0.20 per diluted share
Full Year 2009 Highlights
-- Sidus Financial closed in excess of $1.5 billion in new mortgage
loans during 2009, representing a record in production and profitability
-- Successfully closed and integrated the acquisition of American
Community Bancshares, which added $544.9 million in total assets and
further expanded the Company's footprint into the higher growth Charlotte
markets
-- Total loans grew 41% at December 31, 2009 compared to December 31,
2008; year-over-year loan growth excluding the American Community
Bancshares acquisition was 6%
-- Total deposits increased 58% year-over-year; excluding the American
Community Bancshares acquisition, deposits increased 20%
-- Net loss to common shareholders was $77.5 million (after preferred
dividends), or $5.23 per diluted share
-- Excluding the goodwill impairment charge of $61.6 million recorded
during the third quarter of 2009, the net loss to common shareholders was
$16 million (after preferred dividends), or $1.08 per diluted share
Yadkin Valley Financial Corporation (NASDAQ: YAVY), the holding company for Yadkin Valley Bank and Trust Company, announced financial results for the fourth quarter and full year ending December 31, 2009. Net income available to common shareholders for the fourth quarter of 2009 totaled $3.2 million or $0.20 per diluted share. This compares to a net loss of $69.0 million or $4.28 per diluted share in the third quarter of 2009 (excluding the $61.6 million goodwill impairment charge, the third quarter 2009 net loss was $7.4 million or $0.46 per diluted share), and a net loss of $2.6 million or $0.22 per diluted share in the fourth quarter of 2008.
The net loss available to common shareholders for the year ended December 31, 2009 was $77.5 million or $5.23 per diluted share. Full year 2009 results were significantly impacted by the $61.6 million goodwill impairment charge recorded during the third quarter of 2009. Excluding this charge, the net loss available to common shareholders was $16 million or $1.08 per diluted share. This compares to net income of $3.9 million, or $0.34 per diluted share, for the year ended December 31, 2008. The decrease in net income for the full year ended December 31, 2009 was further impacted by a $37.3 million increase in the provision for loan losses.
Bill Long, President and CEO, commented, "Our fourth quarter results reflect our diligent credit management efforts that have taken place throughout the current credit cycle. We have carefully and consistently assessed the amount of risk in our loan portfolio, and are comfortable with our risk grading process and methodology. We are also very encouraged by the positive trends we are seeing in our nonperforming assets. During the fourth quarter, new loans added to nonperforming status were lower than those charged off or otherwise reclassified. While we are not ready to declare the credit cycle over, we are encouraged by this trend. As we move into 2010, I believe our greatest challenge will be in reducing our foreclosed asset portfolio. I am confident that we have a strong real estate workout staff and process, which will be integral to an efficient reduction in our problem assets.
"Sidus' performance in 2009 also exceeded our expectations, as mortgage loan production and profitability were at record levels. The activity at Sidus during 2009 was driven largely by an increase in mortgage refinancing activity. During the fourth quarter, we also began marketing in the mid-Atlantic region of Pennsylvania, and we expect to focus on building a national market share during 2010 as we continue to add new markets. The pipeline for new business in the first quarter is encouraging, although it is down from first quarter 2009 levels.
"Our strong deposit growth during the fourth quarter was due to our continued focus on gathering money market, savings, and non-interest bearing deposits. In addition, we achieved this growth across the majority of our markets. We plan to continue our focus on lower cost deposit gathering in 2010, with a particular emphasis on small business accounts.
"On the asset side of the balance sheet, we are continuing to support the local economies across our markets by lending to small businesses and individuals. There are still attractive growth opportunities across our markets, even in the current economic downturn. However, we anticipate that our loan portfolio will remain relatively flat through the first half of 2010 as we expect modest growth to be offset by paydowns in loan balances. Lastly, we expect an improvement in our capital position as we carefully manage our credit costs, balance sheet growth, and liquidity during the first half of 2010."
Fourth Quarter 2009 Financial Highlights
Asset Quality
Nonperforming loans decreased by $10.3 million to $36.3 million, or 2.10% of total gross loans, compared to $46.6 million, or 2.75% of total gross loans, as of the third quarter of 2009. The majority of the decrease was due to total gross charge-offs of nonperforming loans of $8.1 million and transfers to OREO of $11.3 million, which combined more than offset the addition of $10.1 million to nonaccrual loans.
Nonperforming Loan Analysis
(Dollars in thousands)
-------------------------------------------
December 31, 2009 September 30, 2009
--------------------- ---------------------
% of % of
Outstanding Total Outstanding Total
Loan Type Balance Loans Balance Loans
------------ ------- ------------ -------
Construction/land development $ 7,917 0.46% $ 7,611 0.45%
Residential construction 9,254 0.54% 15,550 0.92%
HELOC 1,871 0.11% 1,425 0.08%
1-4 Family residential 6,471 0.37% 7,708 0.45%
Commercial real estate 6,622 0.38% 9,115 0.54%
Commercial & industrial 3,518 0.21% 4,390 0.26%
Consumer & other 602 0.03% 810 0.05%
------------ ------- ------------ -------
Total $ 36,255 2.10% $ 46,609 2.75%
------------ ------- ------------ -------
Other real estate owned (OREO) totaled $14.3 million at the end of the fourth quarter, up from $9.4 million at the end of the third quarter. The increase in OREO was primarily due to the addition of 31 properties, predominantly 1-4 family residential properties, totaling $9.0 million, offset by sales of $3.9 million. Total nonperforming assets were $50.6 million or 2.39% of total assets, down from $55.1 million, or 2.68% of total assets as of September 30, 2009.
During the fourth quarter of 2009, the provision for loan losses decreased $15.1 million to $3.1 million compared to the third quarter. The allowance for loan losses was $48.6 million at December 31, 2009, a decrease of $5.7 million compared to $54.3 million in the third quarter. The decrease in the provision for loan losses and the allowance for loan losses was primarily due to an improvement in the Company's credit metrics and outlook. Net charge-offs totaled 2.05% of average loans on an annualized basis compared to 2.39% on an annualized basis during the third quarter. Loan loss reserves as a percentage of total gross loans decreased to 2.82% from 3.21% in the third quarter, and 2.90% of total loans held for investment from 3.30% in the third quarter. Loan loss reserves totaled 134% of nonperforming loans, an increase from 116% in the third quarter.
Out of the $48.6 million in total allowance for loan losses at December 31, 2009, the specific allowance for impaired loans accounted for $9.0 million, down from $11.4 million at the end of the third quarter. The remaining general allowance, $39.6 million, was attributed to unimpaired loans and was down from $42.9 million at the end of the third quarter.
Net Interest Income and Net Interest Margin
Net interest income totaled $17.9 million, a decrease of $519,000, or 3%, compared to the third quarter of 2009. The net interest margin increased slightly to 3.83% from 3.82%. The modest increase in the net interest margin was due to relative stability in earning asset yields and liability costs. In addition, $21.6 million in on-balance sheet liquidity was added during the fourth quarter of 2009 to lock in lower cost funding sources. The net interest margin continues to be positively impacted by adjusting assets and liabilities to their fair market values as part of purchase accounting treatment relating to the merger with American Community Bank. Excluding these fair market value adjustments, the core net interest margin was 3.43%, an increase of 50 basis points compared to the third quarter.
Non-Interest Income
Non-interest income increased 11.2% to $6.3 million, compared to $5.7 million in the third quarter of 2009. The sequential increase in non-interest income was primarily due to a 5% increase in other service fees, a 2% increase in net mortgage loan sale gains, and a $479,000 increase in mortgage banking income. During the quarter, mortgage loan production increased due to greater mortgage refinance activity, contributing to the increase in other service fees and mortgage loan gains.
Non-Interest Expense
Non-interest expense decreased by $64.2 million to $14.5 million, compared to $78.7 million in the third quarter of 2009. The decrease was primarily due to the non-cash goodwill impairment charge of $61.6 million recorded during the third quarter of 2009. Excluding the goodwill impairment charge, non-interest expense decreased $2.7 million, or 16%, due to a 12% decrease in salaries and employee benefits, a 36% decrease in FDIC assessment expenses, and a 19% decrease in other expenses. The decrease in salaries and employee benefits was primarily due to decreases in incentive compensation and commissions, as well as lower payroll taxes. The decrease in FDIC assessment expenses was due primarily to a special assessment that occurred in the third quarter. The decrease in other expenses was primarily due to lower professional fees.
Balance Sheet and Capital
Compared to the third quarter of 2009, total gross loans increased $32.9 million, or 2%. Loan growth was primarily due to increases in commercial and industrial loans, as well as commercial lines of credit and owner-occupied commercial real estate loans. Loan growth was primarily concentrated within the Piedmont and Cardinal markets.
Total deposits increased $75.0 million, or 4%, compared to the third quarter of 2009. Deposit growth was primarily related to an 8% increase in NOW, Savings, and Money Market balances, which occurred across the majority of the Company's markets. Brokered CDs and CDARs remain a relatively small portion of the Company's funding sources, as these deposits represented 8% of total deposits at December 31, 2009, compared to 7% at September 30, 2009.
The bank remains well-capitalized for regulatory purposes. As of December 31, 2009, the bank's Tier 1, total capital, and leverage ratios were 9.16%, 10.43% and 8.16%, respectively. For capital adequacy purposes, Tier 1, total capital, and leverage ratios must be at least 4.00%, 8.00% and 4.00%, respectively.
Conference Call
Yadkin Valley Financial Corporation will host a conference call at 10:00 a.m. EDT on Thursday, January 28, 2010 to discuss financial results, business highlights, and outlook. The call may be accessed by dialing 888-471-3828 at least 10 minutes prior to the call. A webcast of the call may also be accessed at http://investor.shareholder.com/media/eventdetail.cfm?eventid=77197&CompanyID=YAVY&e=1&mediaKey=C0BD0B7D7BA30A3E46A5C745FA0F7F34 (Due to its length, this URL may need to be copied and pasted into your Internet browser's address field. Remove the extra space if one exists.) A replay of the conference call will be available until February 4th by dialing 888-203-1112 and entering access code 1820554.
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 42 branches throughout its five regions primarily in North Carolina. The Yadkin Valley Bank region serves Ashe, Forsyth, Surry, Wilkes, and Yadkin Counties. The Piedmont Bank region serves Iredell and Mecklenburg Counties. The High Country Bank region serves Avery and Watauga Counties. The Cardinal State Bank region serves Durham, Orange, and Granville Counties. The American Community Bank region serves Mecklenburg and Union Counties in North Carolina, and Cherokee and York Counties in South Carolina. The Bank provides mortgage lending services through its subsidiary, Sidus Financial, LLC, headquartered in Greenville, North Carolina and operates a loan production office in Wilmington, North Carolina. Securities brokerage services are provided by Main Street Investment Services, Inc., a Bank subsidiary with five 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.
FORWARD-LOOKING STATEMENTS
Certain statements in this news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements include but are not limited to (1) statements regarding potential future economic recovery, (2) statements with respect to our plans, objectives, expectations and intentions and other statements that are not historical facts, and (3) other statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," and "projects," as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors 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 the future events, plans, or expectations contemplated by our company will be achieved.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the company's loan portfolio and allowance for loan losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (5) changes in the U.S. legal and regulatory framework; and (6 ) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on the company. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC's Internet site (http://www.sec.gov). All subsequent written and oral forward-looking statements concerning the company or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
Yadkin Valley Financial Corporation
Condensed Consolidated Statements of Income (Loss)
(unaudited)
($ in thousands except share and per
share data) For the Three Months Ended
----------------------------------
Dec 31, Sept 30, Dec 31,
2009 2009 2008
---------- ---------- ----------
INTEREST INCOME:
Interest and fees on loans $ 23,627 $ 24,731 $ 16,470
Interest on federal funds sold 4 19 11
Interest and dividends on securities:
Taxable 1,263 1,311 1,133
Non-taxable 576 566 394
Interest-bearing deposits 13 10 75
---------- ---------- ----------
TOTAL INTEREST INCOME 25,483 26,637 18,083
---------- ---------- ----------
INTEREST EXPENSE:
Time deposits of $100,000 or more 3,273 4,517 3,102
Other interest bearing deposits 3,642 3,005 4,421
Borrowed funds 706 734 925
---------- ---------- ----------
TOTAL INTEREST EXPENSE 7,621 8,256 8,448
---------- ---------- ----------
NET INTEREST INCOME 17,862 18,381 9,635
PROVISION FOR LOAN LOSSES 3,146 18,286 7,617
---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 14,716 95 2,018
---------- ---------- ----------
NON-INTEREST INCOME:
Service charges on deposit accounts 1,572 1,577 1,148
Other service fees 1,250 1,189 779
Net gain on sales of mortgage loans 2,812 2,751 2,250
Income on investment in bank-owned life
insurance 145 235 221
Mortgage banking income 486 7 123
Other than temporary impairment of
securities (17) (175) (43)
Other income 64 94 103
---------- ---------- ----------
TOTAL NON-INTEREST INCOME 6,312 5,678 4,581
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and employee benefits 6,938 7,762 4,868
Occupancy and equipment expense 1,865 1,858 1,123
Printing and supplies 273 345 333
Data processing 489 349 186
Communications expense 448 372 277
Advertising and marketing expense 414 357 854
Amortization of core deposit intangible 338 327 225
FDIC assessment expense 619 973 420
Acquisition (4) 292 -
Attorney 112 469 136
Loan collection expense 637 370 139
Goodwill impairment - 61,566 -
Net loss on other real estate owned 189 1,218 114
Other expense 2,165 2,490 2,157
---------- ---------- ----------
TOTAL NON-INTEREST EXPENSE 14,483 78,748 10,832
---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES 6,545 (72,975) (4,233)
INCOME TAX (BENEFIT) 2,630 (4,716) (1,666)
---------- ---------- ----------
NET INCOME (LOSS) $ 3,915 $ (68,259) $ (2,567)
Preferred stock dividend 754 708 -
---------- ---------- ----------
NET INCOME (LOSS) TO COMMON
SHAREHOLDERS $ 3,161 $ (68,967) $ (2,567)
========== ========== ==========
INCOME (LOSS) PER COMMON SHARE:
Basic $ 0.20 $ (4.28) $ (0.22)
Diluted $ 0.20 $ (4.28) $ (0.22)
CASH DIVIDENDS PER COMMON SHARE $ - $ - $ 0.13
AVERAGE SHARES OUTSTANDING:
Basic 16,129,640 16,129,632 11,533,334
Diluted 16,129,640 16,129,632 11,533,334
Yadkin Valley Financial Corporation
Consolidated Statements of Income (Loss)
(unaudited)
($ in thousands except share and per share data)
For the
Twelve Months Ended
----------------------------------
Dec. 31 Dec. 31 Dec. 31
2009 2008 2007
---------- ---------- -----------
INTEREST INCOME:
Interest and fees on loans $ 88,321 $ 67,459 $ 68,225
Interest on federal funds sold 25 56 298
Interest and dividends on securities:
Taxable 5,112 5,118 5,286
Non-taxable 2,039 1,517 1,236
Interest-bearing deposits 45 376 148
---------- ---------- -----------
TOTAL INTEREST INCOME 95,542 74,526 75,193
---------- ---------- -----------
INTEREST EXPENSE:
Time deposits of $100,000 or more 11,354 11,735 11,984
Other time and savings deposits 17,630 18,526 19,008
Borrowed funds 2,847 4,275 2,309
---------- ---------- -----------
TOTAL INTEREST EXPENSE 31,831 34,536 33,301
---------- ---------- -----------
NET INTEREST INCOME 63,711 39,990 41,892
PROVISION FOR LOAN LOSSES 48,439 11,109 2,489
---------- ---------- -----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 15,272 28,881 39,403
---------- ---------- -----------
NON-INTEREST INCOME:
Service charges on deposit accounts 5,732 4,394 3,946
Other service fees 4,868 3,378 3,561
Net gain on sales of mortgage loans 13,563 7,679 5,882
Net gain on sales of investment
securities - - 45
Income on investment in bank-owned life
insurance 846 928 1,045
Mortgage banking income (loss) (21) 190 451
Other than temporary impairment of
securities (372) (1,016) -
Other income 227 311 514
---------- ---------- -----------
TOTAL NON-INTEREST INCOME 24,843 15,864 15,444
---------- ---------- -----------
NON-INTEREST EXPENSES:
Salaries and employee benefits 28,626 19,921 19,161
Occupancy and equipment expense 6,893 4,701 3,917
Printing and supplies 1,122 889 550
Data processing 1,397 786 399
Communications expense 1,471 1,035 1,127
Advertising and marketing expense 1,361 1,299 550
Amortization of core deposit intangible 1,240 877 777
FDIC assessment expense 4,052 862 188
Acquisition 2,590 - -
Attorney 1,104 376 243
Loan collection expense 1,232 213 126
Goodwill impairment 61,566 - -
Net loss on other real estate owned 1,558 363 287
Other expense 9,836 8,315 5,634
---------- ---------- -----------
TOTAL NON-INTEREST EXPENSE 124,048 39,637 32,959
---------- ---------- -----------
INCOME (LOSS) BEFORE INCOME TAXES (83,933) 5,108 21,888
INCOME TAX (BENEFIT) (8,875) 1,241 7,200
---------- ---------- -----------
NET INCOME (LOSS) $ (75,058) $ 3,867 $ 14,688
Preferred stock dividend 2,435 - -
---------- ---------- -----------
NET INCOME (LOSS) TO COMMON
SHAREHOLDERS $ (77,493) $ 3,867 $ 14,688
========== ========== ===========
INCOME (LOSS) PER COMMON SHARE:
Basic $ (5.23) $ 0.34 $ 1.39
Diluted $ (5.23) $ 0.34 $ 1.37
CASH DIVIDENDS PER COMMON SHARE $ 0.12 $ 0.52 $ 0.51
AVERAGE SHARES OUTSTANDING:
Basic 14,808,325 11,235,943 10,594,567
Diluted 14,808,325 11,306,472 10,712,667
Yadkin Valley Financial Corporation
Consolidated Balance Sheets
Unaudited
($ in thousands except share and per share data)
As of
-------------------------------------
Dec. 31, Dec. 31, Dec. 31,
2009 2008* 2007*
----------- ----------- -----------
ASSETS
CASH AND CASH EQUIVALENTS
Cash and due from banks $ 89,668 $ 22,554 $ 24,268
Federal funds sold 92 58 -
Interest-bearing deposits 2,576 3,411 2,058
----------- ----------- -----------
TOTAL CASH AND CASH EQUIVALENTS 92,336 26,023 26,326
----------- ----------- -----------
SECURITIES AVAILABLE FOR SALE 183,841 137,813 142,484
GROSS LOANS 1,676,448 1,187,569 898,753
Less: Allowance for loan losses (48,625) (22,355) (12,446)
----------- ----------- -----------
NET LOANS 1,627,823 1,165,214 886,307
----------- ----------- -----------
LOANS HELD FOR SALE 49,715 49,929 52,754
ACCRUED INTEREST RECEIVABLE 7,783 5,442 6,055
PREMISES AND EQUIPMENT, NET 43,642 33,900 26,780
FORECLOSED REAL ESTATE 14,345 4,018 602
FEDERAL HOME LOAN BANK STOCK, AT
COST 10,539 7,877 2,557
INVESTMENT IN BANK-OWNED LIFE
INSURANCE 24,454 23,607 22,683
GOODWILL 4,944 53,503 32,697
CORE DEPOSIT INTANGIBLE 6,187 4,660 4,261
OTHER ASSETS 48,003 12,302 7,571
----------- ----------- -----------
TOTAL ASSETS $ 2,113,612 $ 1,524,288 $ 1,211,077
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS
Non-interest bearing demand
deposits $ 207,850 $ 153,573 $ 154,979
NOW, savings and money market
accounts 445,508 283,891 232,888
Time certificates:
Over $100,000 611,114 333,375 267,530
Other 557,280 384,203 308,045
----------- ----------- -----------
TOTAL DEPOSITS 1,821,752 1,155,042 963,442
----------- ----------- -----------
SHORT-TERM BORROWINGS 44,467 169,112 66,425
LONG-TERM BORROWINGS 79,001 38,850 37,774
ACCRUED INTEREST PAYABLE 3,015 3,555 3,435
OTHER LIABILITIES 13,111 8,085 6,732
----------- ----------- -----------
TOTAL LIABILITIES 1,961,346 1,374,644 1,077,808
----------- ----------- -----------
SHAREHOLDERS' EQUITY
COMMON STOCK 16,130 11,537 10,563
PREFERRED STOCK 46,152 - -
SURPLUS 118,154 88,030 70,987
RETAINED EARNINGS (ACCUMULATED
DEFICIT) (31,080) 48,070 51,087
ACCUMULATED OTHER COMPREHENSIVE
INCOME 2,910 2,007 632
----------- ----------- -----------
TOTAL SHAREHOLDERS' EQUITY 152,266 149,644 133,269
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 2,113,612 $ 1,524,288 $ 1,211,077
=========== =========== ===========
(a) $1.00 par value, authorized 20,000,000 shares; issued 16,129,640 in
2009 and 11,536,500 in 2008.
(b) 1,000,000 shares of authorized, no par value preferred stock of which
49,312 shares are issued and outstanding in
2009 and none in 2008.
(c) Includes ten-year warrants with an allocated fair value of $1.7
million and $1.8 million at issuance to purchase up to
385,900 shares and 273,534 shares of common stock, $1.00 par value,
at an initial price of $13.99 per share and
$7.30 per share, respectively
* Derived from audited consolidated financial statements
Yadkin Valley Financial Corporation
(unaudited)
At or For the Three Months Ended
-----------------------------------------------------
Dec. 31 Sept. 30 June 30, March 31, Dec. 31,
2009 2009 2009 2009 2008
--------- --------- --------- --------- ---------
Per Share Data:
Basic Earnings
(Loss) per Share $ 0.20 $ (4.28) $ (0.46) $ (0.40) $ (0.22)
Diluted Earnings
(Loss) per Share 0.20 (4.28) (0.46) (0.40) (0.22)
Book Value per Share 6.58 6.39 10.48 12.63 12.97
Cash Dividends per
Share - - 0.06 0.06 0.13
Selected Performance
Ratios:
Return on Average
Assets (annualized) 0.76% -12.62% -1.27% -1.07% -0.69%
Return on Average
Equity (annualized) 10.24% -125.93% -12.81% -9.25% -6.64%
Net Interest Margin
(annualized) 3.83% 3.82% 3.76% 2.87% 2.94%
Net Interest Spread
(annualized) 3.59% 3.60% 3.45% 2.53% 2.57%
Non-interest Income
as a % of Revenue 30.07% 97.98% 87.40% 113.72% 68.88%
Non-interest Income
as a % of Average
Assets 0.31% 0.22% 0.37% 0.34% 0.30%
Non-interest Expense
as a % of Average
Assets 0.71% 3.62% 0.92% 0.75% 0.73%
Net Non-interest
income as a % of
Average Assets -0.40% -3.41% -0.55% -0.42% -0.42%
Asset Quality:
Nonperforming Loans
(000's) $ 36,256 $ 45,685 $ 32,008 $ 17,420 $ 13,647
Nonperforming Assets
(000's) 50,601 55,051 39,777 21,738 17,665
Nonperforming Loans
to Total Loans 2.10% 2.75% 1.82% 1.28% 1.10%
Nonperforming Assets
to Total Assets 2.39% 2.73% 1.84% 1.33% 1.16%
Allowance for Loan
Losses to Total
Loans Held For
Investment 2.90% 3.30% 2.82% 2.61% 1.88%
Allowance for Loan
Losses to
Nonperforming Loans 134.00% 116.00% 144.00% 177.00% 164.00%
Net Charge-offs/
Recoveries to
Average Loans
(annualized) 2.05% 2.39% 0.27% 0.63% 0.60%
Capital Ratios:
Equity to Total
Assets 5.02% 7.27% 9.43% 11.00% 9.82%
Tier 1 leverage
ratio (1) 8.16% 7.49% 7.87% 8.65% 8.12%
Tier 1 risk-based
ratio (1) 9.16% 8.91% 8.67% 9.71% 9.01%
Total risk-based
capital ratio (1) 10.43% 10.18% 9.92% 10.97% 10.26%
Non-GAAP
disclosures:
Tangible Book Value
per Share 5.89 5.68 5.93 7.61 7.93
Return on Tangible
Equity (annualized) 11.06% -191.86% -18.93% -13.62% -10.79%
Tangible Equity to
Tangible Assets (2) 4.52% 4.49% 6.24% 7.73% 6.24%
Efficiency Ratio (3) 57.08% 67.02% 73.44% 75.38% 73.32%
Reconciliation of
GAAP to Non-GAAP
disclosures
Total Assets (000's) 2,113,612 2,051,672 2,158,360 1,637,083 1,524,288
Goodwill 4,944 4,944 66,510 53,503 53,503
Core Deposit
Intangible 6,187 6,525 6,852 4,435 4,660
--------- --------- --------- --------- ---------
Tangible Assets
(Non-GAAP) 2,102,481 2,040,203 2,084,998 1,579,145 1,466,125
Total Equity (000's) 152,266 149,109 203,469 180,070 149,644
Goodwill 4,944 4,944 66,510 53,503 53,503
Core Deposit
Intangible 6,187 6,525 6,852 4,435 4,660
--------- --------- --------- --------- ---------
Tangible Equity
(Non-GAAP) 141,135 137,640 130,107 122,132 91,481
Average equity
(000's) 151,783 206,860 202,766 182,448 145,184
Average Goodwill and
Core Deposit
Intangible 11,328 73,900 66,412 58,501 58,955
--------- --------- --------- --------- ---------
Average tangible
equity (Non-GAAP) 140,455 132,960 136,354 123,947 86,229
Non-interest expense
(000's) 14,483 78,748 19,192 11,627 10,832
Amortization of
intangibles 338 327 350 225 225
Goodwill impairment - 61,566 - - -
--------- --------- --------- --------- ---------
Adjusted
non-interest
expense (Non-GAAP) 14,145 16,855 18,842 11,402 10,607
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) Tangible Equity is the difference of stockholders' equity less the sum
of goodwill and core deposit intangible Tangible Assets are the
difference of total assets less the sum of goodwill and core deposit
intangible
(3) The Efficiency Ratio was calculated excluding the goodwill impairment
charge of $61,565,768 recorded in the third quarter
Yadkin Valley Financial Corporation
(unaudited)
For the Twelve Months
Ended Dec. 31
----------------------------------
2009 2008 2007 2006
------- ------- ------- -------
Selected Performance Ratios:
Return on Average Assets (annualized) -3.83% 0.28% 1.31% 1.31%
Return on Average Equity (annualized) -39.22% 2.66% 11.32% 11.52%
Net Interest Margin 3.59% 3.29% 4.20% 4.45%
Net Interest Spread 3.31% 2.84% 3.49% 3.88%
Non-interest Income as a % of Revenue 62.28% 34.93% 28.15% 27.04%
Non-interest Income as a % of Average
Assets 1.29% 1.13% 1.37% 1.36%
Non-interest Expense as a % of Average
Assets 6.36% 2.85% 2.93% 3.05%
Net Non-interest income as a % of
Average Assets -5.07% -1.73% -1.56% -1.69%
Asset Quality:
Net Charge-offs to Average Loans
(annualized) 1.39% 0.26% 0.10% 0.10%
Non-GAAP disclosures:
Return on Tangible Equity (annualized) -54.03% 4.06% 15.90% 16.80%
Efficiency Ratio (1) 136.88% 68.19% 55.45% 56.16%
Reconciliation of GAAP to Non-GAAP
disclosures
Average equity (000's) 191,363 145,184 129,722 119,749
Average Goodwill and Core Deposit
Intangible 52,444 49,979 37,363 37,451
------- ------- ------- -------
Average tangible equity (Non-GAAP) 138,919 95,205 92,359 82,298
Non-interest expense (000's) 124,048 39,637 32,959 32,093
Amortization of intangibles 1,240 877 777 813
Goodwill impairment 61,566 - - -
------- ------- ------- -------
Adjusted non-interest expense
(Non-GAAP) 61,615 39,776 32,182 31,280
(1) The Efficiency Ratio was calculated excluding the goodwill impairment
charge of $61,565,768 recorded in the third quarter
Yadkin Valley Financial Corporation
Average Balance Sheets and Net Interest Income Analysis
(Dollars in Thousands)
(Unaudited)
Three Months Ended Dec. 31,
---------------------------------------------------------
2009 2008
-------------------------- --------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
----------- -------- ---- ----------- -------- ----
INTEREST EARNING
ASSETS
Total loans (1,2) $ 1,703,155 $ 23,711 5.52% $ 1,179,459 $ 16,505 5.55%
Federal funds
sold 5,531 3 0.22% 4,609 11 0.95%
Investment
securities 200,603 2,362 4.67% 137,010 1,700 4.92%
Interest-bearing
deposits 2,920 14 1.90% 6,220 76 4.85%
----------- -------- ----------- --------
Total average
earning assets
(1) 1,912,209 26,090 5.41% (6) 1,327,298 18,292 5.47%
-------- --------
Noninterest
earning assets 124,707 149,763
----------- -----------
Total average
assets $ 2,036,916 $ 1,477,061
=========== ===========
INTEREST BEARING
LIABILITIES
Time deposits $ 1,100,181 $ 6,144 2.22% $ 701,426 $ 6,638 3.75%
Other deposits 428,007 771 0.71% 281,571 886 1.25%
Borrowed funds 134,483 706 2.08% 175,592 925 2.09%
----------- -------- ----------- --------
Total interest
bearing
liabilities 1,662,671 7,621 1.82% (7) 1,158,589 8,449 2.89%
Noninterest
bearing deposits 219,690 153,322
Other liabilities 2,772 11,806
----------- -----------
Total average
liabilities 1,885,133 1,323,717
----------- -----------
Shareholders'
equity 151,783 153,344
Total average
liabilities and
shareholders' ----------- -----------
equity $ 2,036,916 $ 1,477,061
=========== ===========
NET INTEREST
INCOME/YIELD -------- --------
(3,4) $ 18,469 3.83% $ 9,843 2.94%
======== ========
INTEREST SPREAD (5) 3.59% 2.57%
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 2009 includes $1,042 of accretion for purchase
accounting adjustments related to loans acquired in the merger with
American Community.
7. Interest expense for 2009 includes $839 of accretion for purchase
accounting adjustments related to deposits and borrowings acquired in
the merger with American Community.
Yadkin Valley Financial Corporation
Average Balance Sheets and Net Interest Income Analysis
(Dollars in Thousands)
(Unaudited)
Twelve Months Ended Dec. 31,
---------------------------------------------------------
2009 2008
-------------------------- --------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
----------- -------- ---- ----------- -------- ----
INTEREST EARNING
ASSETS
Total loans (1,2) $ 1,596,094 $ 88,486 5.54% $ 1,088,626 $ 67,609 6.21%
Federal funds
sold 13,090 25 0.19% 2,451 56 2.28%
Investment
securities 189,333 8,051 4.25% 138,674 7,304 5.27%
Interest-bearing
deposits 8,344 45 0.54% 9,885 376 3.80%
----------- -------- ----------- --------
Total average
earning assets
(1) 1,806,861 96,607 5.35% (6) 1,239,636 75,345 6.08%
-------- --------
Noninterest
earning assets 150,434 136,221
----------- -----------
Total average
assets $ 1,957,295 $ 1,375,857
=========== ===========
INTEREST BEARING
LIABILITIES
Time deposits $ 1,024,653 $ 25,855 2.52% $ 640,282 $ 26,210 4.09%
Other deposits 377,951 3,129 0.83% 272,785 4,051 1.49%
Borrowed funds 161,099 2,847 1.77% 152,067 4,275 2.81%
----------- -------- ----------- --------
Total interest
bearing
liabilities 1,563,703 31,831 2.04% (7) 1,065,134 34,536 3.24%
Noninterest
bearing deposits 190,363 155,503
Other liabilities 11,866 10,036
----------- -----------
Total average
liabilities 1,765,932 1,230,673
----------- -----------
Shareholders'
equity 191,363 145,184
Total average
liabilities and
shareholders' ----------- -----------
equity $ 1,957,295 $ 1,375,857
=========== ===========
NET INTEREST
INCOME/YIELD
(3,4) -------- --------
$ 64,776 3.59% $ 40,809 3.29%
======== ========
INTEREST SPREAD (5) 3.31% 2.84%
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 2009 includes $6,036 of accretion for purchase
accounting adjustments related to loans acquired in the merger with
American Community.
7. Interest expense for 2009 includes $4,232 of accretion for purchase
accounting adjustments related to deposits and borrowings acquired in
the merger with American Community.
For additional information contact:
William A. Long
President and Chief Executive Officer
(336) 526-6312
Jan H. Hollar
Executive Vice President and Chief Financial Officer
(704) 768-1161
Email Contact
Megan R. Malanga
Nvestcom Investor Relations
(954) 781-4393
Email Contact
