ELKIN, NC, Apr. 22, 2010 (Marketwire) --
ELKIN, NC -- (Marketwire) -- 04/22/10 -- Yadkin Valley Financial Corporation (NASDAQ: YAVY) --
First Quarter Financial Highlights:
-- Total deposits increased 5% compared to the fourth quarter of 2009;
total core deposits increased 14%
-- Tier 1, total capital, and leverage ratios of 9.26%, 10.52%, and
7.76%, respectively, for the bank
-- Provision for loan losses of $4.4 million, an increase of $1.2 million
compared to the fourth quarter of 2009
-- Loan loss reserves decreased to 2.70% of total gross loans, or 2.74% of
total loans held for investment, compared to 2.82% of total gross loans
or 2.90% of total loans held for investment in the fourth quarter of
2009
-- Loan loss reserves decreased to 86% of nonperforming loans, compared
to 134% of nonperforming loans in the fourth quarter of 2009
-- Specific allowance for impaired loans increased to $12.8 million, from
$11.0 million in the fourth quarter of 2009
-- Nonperforming assets increased to 3.16% of total assets from 2.39% in
the fourth quarter of 2009
-- Net charge-offs decreased to $7.6 million or 1.83% of average loans on
an annualized basis, compared to $8.8 million or 2.05% of average loans
on an annualized basis in the fourth quarter of 2009
-- Liquidity ratio improved to 17%, compared to 12% as of December 31,
2009
-- Net interest margin was 3.47%, a decrease of 36 basis points compared
to 3.83% in the fourth quarter
-- Net income available to common shareholders was $143,000, or $0.01 per
diluted share
Yadkin Valley Financial Corporation (NASDAQ: YAVY), the holding company for Yadkin Valley Bank and Trust Company, announced financial results for the first quarter of 2010. Net income available to common shareholders for the first quarter of 2010 totaled $143,000 or $0.01 per diluted share. This compares to net income of $3.2 million or $0.20 per diluted share in the fourth quarter of 2009, and a net loss of $4.6 million, or $0.40 per diluted share, in the first quarter of 2009.
Bill Long, President and CEO commented, "While our net income decreased in the first quarter compared to the fourth quarter due to the reduction in our net interest margin, we ended the quarter with a stronger and more liquid balance sheet. We enhanced our liquidity position through strong growth in our core deposits. While loan demand has remained slow due to the weak economic conditions, we invested these funds in lower yielding short term investments, which achieved a more flexible and liquid balance sheet. While this strategy pressured our earnings in the first quarter, we believe it was the right thing to do in such an uncertain economic environment.
"We will continue to focus on core deposit growth throughout 2010 to maintain our strong liquidity position. During the second quarter, we anticipate that our net interest margin will remain relatively stable, as we expect to improve asset yields and deposit costs. However, in light of the prolonged downturn in the economy, we anticipate a modest decrease in our loan portfolio during the second quarter due to slow loan demand combined with normal loan payoff activity.
"We are continuing to carefully manage our loan portfolio for early signs of stress, and believe that we are weathering the current credit cycle well. While our allowance for loan loss reserves decreased slightly in the first quarter, the majority of this decrease was due to a decrease in the general allowance for loan losses. The specific allowance for impaired loans increased approximately 16%, and we believe that our allowance for loan loss reserves is adequate based upon the current risks that we have identified in our loan portfolio.
"Mortgage production remains diminished compared to the first and fourth quarters of 2009 due to the slow housing and mortgage markets, and as a result, mortgage-related fee income has decreased. We are cautiously optimistic that it will rebound somewhat in the second quarter, however, not to the levels in the first half of 2009. We base this optimism on Sidus' increased focus on retail operations, while traditionally it has focused more on the wholesale market.
"We remain well capitalized from a regulatory perspective and continue to make progress in supporting our capital ratios through internal capital generation. We will continue to closely monitor our capital levels, as well as equity market conditions, to optimally manage our capital relative to the safety and soundness of our bank while creating long term value for our shareholders."
First Quarter 2010 Financial Highlights
Asset Quality
Nonperforming loans increased by $16.6 million to $52.9 million, or 3.15% of total gross loans, compared to $36.3 million, or 2.10% of total gross loans, as of the fourth quarter of 2009. The majority of the increase was due to four construction loans totaling $8.5 million and five commercial real estate loans totaling $6.5 million.
Nonperforming Loan Analysis
(Dollars in thousands)
-----------------------------------------------
March 31, 2010 December 31, 2009
----------------------- -----------------------
% of % of
Outstanding Total Outstanding Total
Loan Type Balance Loans Balance Loans
----------- ---------- ----------- ----------
Construction/land
development $ 12,883 0.77% $ 7,917 0.46%
Residential construction 13,859 0.82% 9,254 0.54%
HELOC 1,612 0.10% 1,871 0.11%
1-4 Family residential 5,647 0.34% 6,471 0.37%
Commercial real estate 13,453 0.80% 6,622 0.38%
Commercial & industrial 4,785 0.28% 3,518 0.20%
Consumer & other 631 0.04% 602 0.03%
----------- ---------- ----------- ----------
Total $ 52,870 3.15% $ 36,255 2.10%
----------- ---------- ----------- ----------
Other real estate owned (OREO) totaled $16.7 million at the end of the first quarter, up from $14.3 million at the end of the fourth quarter. The increase in OREO was primarily due to the addition of 26 residential construction properties totaling $4.4 million. Of these properties, 16 totaling $1.3 million were related to two borrowers. Total nonperforming assets were $69.5 million or 3.16% of total assets, up from $50.6 million, or 2.39% of total assets as of December 31, 2009.
During the first quarter of 2010, the provision for loan losses increased $1.2 million to $4.4 million compared to the fourth quarter. The allowance for loan losses was $45.4 million at March 31, 2010, a decrease of $3.2 million compared to $48.6 million in the fourth quarter. Out of the $45.4 million in total allowance for loan losses at March 31, 2010, the specific allowance for impaired loans accounted for $12.8 million, up from $11.0 million at the end of the fourth quarter. The remaining general allowance, $32.6 million, was attributed to unimpaired loans and was down from $37.6 million at the end of the fourth quarter.
Net charge-offs totaled $7.6 million, or 1.83% of average loans on an annualized basis, compared to $8.8 million, or 2.05% on an annualized basis, during the fourth quarter. Loan loss reserves as a percentage of total gross loans decreased to 2.70% from 2.82% in the fourth quarter, and 2.74% of total loans held for investment from 2.90% in the fourth quarter. Loan loss reserves totaled 86% of nonperforming loans, a decrease from 134% in the fourth quarter.
Net Interest Income and Net Interest Margin
Net interest income totaled $16.8 million, a decrease of $1.1 million, or 6%, compared to the fourth quarter of 2009. The net interest margin decreased to 3.47% from 3.83%, primarily due to an enhanced liquidity position resulting from a 27% increase in core CDs which were invested in short term investments. 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 3.27%, a decrease of 16 basis points compared to 3.43% in the fourth quarter.
Non-Interest Income
Non-interest income decreased 40% to $3.8 million, compared to $6.3 million in the fourth quarter of 2009. The sequential decrease in non-interest income was primarily due to a 33% decrease in other service fees, a 53% decrease in net mortgage loan sale gains, and a $430,000 decrease in mortgage banking income. These decreases were all related to a lower level of mortgage loan production compared to the fourth quarter of 2009, due to diminished loan demand related to the economic environment. Non-interest income also included an other than temporary impairment charge of $205,000 on privately held equity securities, or approximately $0.01 per diluted share on an after tax basis.
Non-Interest Expense
Non-interest expense remained stable at $14.5 million, compared to $14.5 million in the fourth quarter of 2009. Salaries and employee benefits decreased 4%, primarily due to decreases in incentive compensation and commissions. Offsetting this decrease was a 5% increase in occupancy and equipment expense, a 34% increase in FDIC assessment expenses, and a $607,000 increase in the net loss on OREO. The increase in occupancy and equipment expense was primarily due to increased maintenance expenses, while the increase in FDIC assessment expense was due to an increased deposit base. The increase in the net loss on OREO was primarily due to write-downs totaling $747,000 on foreclosed real estate based on updated appraised values.
Balance Sheet and Capital
Compared to the fourth quarter of 2009, total gross loans decreased $20.4 million, or 1%. The slight decrease in total gross loans was primarily due to limited loan demand due to the current economic environment, offset by normal payoff activity.
Total deposits increased $87.3 million or 5% compared to the fourth quarter of 2009, and total core deposits increased 14%. Deposit growth was primarily related to a 28% increase in CDs with balances less than $100,000, as well as a 2% increase in NOW, Savings, and Money Market balances. Deposit growth, which was primarily the result of marketing campaigns targeting core deposits, occurred within all of the Company's markets, and was particularly strong within the American Community and Cardinal markets. Brokered CDs and CDARs remain a relatively small portion of the Company's funding sources, as these deposits represented 6% of total deposits at March 31, 2010, compared to 8% at December 31, 2009.
The bank remains well-capitalized for regulatory purposes. As of March 31, 2010, the bank's Tier 1, total capital, and leverage ratios were 9.26%, 10.52% and 7.76%, respectively. For capital adequacy purposes, Tier 1, total capital, and leverage ratios must be in excess of 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, April 22, 2010 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 may also be accessed at http://investor.shareholder.com/media/eventdetail.cfm?eventid=80302&CompanyID=YAVY&e=1&mediaKey=C0BD0B7D7BA30A3E46A5C745FA0F7F34. A replay of the conference call will be available until April 28, 2010, by dialing 800-642-1687 and entering access code 70024986.
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
Consolidated Balance Sheet (Unaudited)
March 31, December 31, September 30, June 30, March 31,
2010 2009 (a) 2009 2009 2009
---------- ---------- ---------- ---------- ----------
(Amounts in thousands except share and per share data)
Assets:
Cash and due
from banks $ 233,567 $ 89,668 $ 70,702 $ 39,586 $ 17,670
Federal funds
sold 8 93 1 362 51
Interest-
earning
deposits
with banks 2,162 2,576 2,984 5,150 2,735
Investment
securities 173,196 183,841 191,423 196,229 132,609
Loans 1,656,031 1,676,448 1,646,326 1,641,097 1,182,409
Allowance for
loan losses (45,399) (48,625) (54,270) (46,243) (30,904)
---------- ---------- ---------- ---------- ----------
Net loans 1,610,632 1,627,823 1,592,056 1,594,854 1,151,505
Loans held for
sale 24,308 49,715 46,911 121,142 180,065
Accrued
interest
receivable 7,866 7,783 7,649 7,380 5,276
Bank premises
and equipment 44,075 43,642 44,272 44,531 34,926
Foreclosed
real estate 16,656 14,345 9,366 7,769 4,318
Non-marketable
equity
securities at
cost 10,539 10,539 10,539 10,539 8,260
Investment in
bank-owned
life
insurance 24,660 24,454 24,308 24,073 23,839
Goodwill 4,944 4,944 4,944 66,510 53,503
Core deposit
intangible 5,852 6,186 6,525 6,852 4,435
Other assets 44,647 48,003 39,992 33,383 17,891
---------- ---------- ---------- ---------- ----------
Total assets $2,203,112 $2,113,612 $2,051,672 $2,158,360 $1,637,083
========== ========== ========== ========== ==========
Liabilities
and
shareholders'
equity
Deposits:
Non-interest
bearing $ 210,939 $ 207,850 $ 205,674 $ 201,846 $ 150,662
NOW, savings
and money
market
accounts 455,189 445,508 413,694 396,239 306,699
Time
certificates:
$100,000 or
more 473,114 560,825 549,493 554,704 332,081
Other 769,823 607,569 577,884 625,371 462,397
---------- ---------- ---------- ---------- ----------
Total
deposits 1,909,065 1,821,752 1,746,745 1,778,160 1,251,839
Borrowings 129,029 125,904 136,266 152,756 189,159
Accrued
expenses and
other
liabilities 12,082 13,690 19,552 23,975 16,015
---------- ---------- ---------- ---------- ----------
Total
liabilities 2,050,176 1,961,346 1,902,563 1,954,891 1,457,013
Total
shareholders'
equity 152,936 152,266 149,109 203,469 180,070
---------- ---------- ---------- ---------- ----------
Total
liabilities
and
shareholders'
equity $2,203,112 $2,113,612 $2,051,672 $2,158,360 $1,637,083
========== ========== ========== ========== ==========
Ending shares
outstanding 16,134,640 16,129,640 16,129,640 16,129,640 11,536,500
Average
Balances:
Loans $1,683,199 $1,703,155 $1,705,489 $1,691,622 $1,283,418
Earning assets 1,998,485 1,912,209 1,956,201 1,906,073 1,423,537
Total assets 2,139,084 2,036,916 2,145,768 2,062,786 1,571,130
Interest-
bearing
deposits 1,640,726 1,528,188 1,587,319 1,466,917 1,045,697
Shareholders'
equity 153,973 151,783 215,051 235,591 182,448
Breakdown of
Loans:
Construction $ 344,138 $ 364,853 $ 370,771 $ 383,787 $ 233,844
Commercial,
financial and
other 265,286 271,433 255,954 264,075 198,324
Residential
mortgages 169,267 169,790 169,755 169,138 126,979
Commercial
real estate 625,394 619,151 604,838 586,438 450,043
Installment
loans 47,112 48,545 45,289 45,250 34,196
Revolving 1-4
family loans 204,834 202,676 199,719 192,409 139,023
---------- ---------- ---------- ---------- ----------
Total loans $1,656,031 $1,676,448 $1,646,326 $1,641,097 $1,182,409
========== ========== ========== ========== ==========
Breakdown of
Investments:
U.S.
government
agencies $ 39,756 $ 42,894 $ 45,323 $ 45,356 $ 40,683
Mortgage-
backed
securities 72,810 78,389 83,927 89,870 50,161
State and
municipal
securities 59,574 61,378 62,017 60,877 41,746
Common and
preferred
stocks 1,056 1,180 156 126 19
---------- ---------- ---------- ---------- ----------
Total
investments $ 173,196 $ 183,841 $ 191,423 $ 196,229 $ 132,609
========== ========== ========== ========== ==========
(a) Derived from audited consolidated financial statements
Yadkin Valley Financial Corporation
Consolidated Income Statements (Unaudited)
Three months March 31, December 31, September 30, June 30, March 31,
ended 2010 2009 2009 2009 2009
---------- ---------- ---------- ---------- ----------
(Amounts in thousands except share and per share data)
Interest and
fees on loans $ 22,958 $ 23,627 $ 24,731 $ 23,936 $ 16,028
Interest on
securities 1,770 1,839 1,877 1,876 1,560
Interest on
federal funds
sold 1 4 19 1 1
Interest-
bearing
deposits 61 13 10 10 11
---------- ---------- ---------- ---------- ----------
Total
interest
income 24,790 25,483 26,637 25,823 17,600
---------- ---------- ---------- ---------- ----------
Time deposits
of $100,000
or more 3,361 3,273 4,517 3,733 3,101
Other deposits 4,055 3,642 3,005 3,753 3,960
Borrowed funds 567 706 734 782 625
---------- ---------- ---------- ---------- ----------
Total
interest
expense 7,983 7,621 8,256 8,268 7,686
---------- ---------- ---------- ---------- ----------
Net
interest
income 16,807 17,862 18,381 17,555 9,914
Provision for
loan losses 4,384 3,146 18,286 16,458 10,550
---------- ---------- ---------- ---------- ----------
Net interest
income after
provision
for loan loss 12,423 14,716 95 1,097 (636)
---------- ---------- ---------- ---------- ----------
Non-interest
income
Service
charges on
deposit
accounts 1,437 1,572 1,577 1,535 1,047
Other service
fees 841 1,250 1,189 1,365 1,065
Net gain on
sales of
mortgage
loans 1,334 2,812 2,751 4,802 3,199
Income on
investment
in bank
owned life
insurance 207 145 235 234 231
Mortgage
banking
operations 56 486 7 (207) (307)
Gains on sale
of
securities 44 - - - -
Other than
temporary
impairment
of
investments (205) (17) (175) - (180)
Other 66 64 94 16 49
---------- ---------- ---------- ---------- ----------
Total
non-
interest
income 3,780 6,312 5,678 7,745 5,104
---------- ---------- ---------- ---------- ----------
Non-interest
expense
Salaries
and
employee
benefits 6,663 6,938 7,762 8,300 5,627
Occupancy
and
equipment 1,966 1,865 1,858 1,842 1,327
Printing
and
supplies 274 273 345 272 232
Data
processing 313 489 349 427 133
Communication
expense 459 448 372 329 323
Advertising
and
marketing 178 414 357 213 376
Amortization
of core
deposit
intangible 334 338 327 350 225
FDIC
assessment
expense 830 619 973 1,797 662
Attorney
fees 75 112 469 409 114
Loan
collection
expense 272 637 370 161 64
Goodwill
impairment - - 61,566 - -
Net loss
on other
real
estate
owned 796 189 1,218 138 13
Other 2,372 2,161 2,782 4,954 2,530
---------- ---------- ---------- ---------- ----------
Total
non-interest
expense 14,532 14,483 78,748 19,192 11,626
---------- ---------- ---------- ---------- ----------
Income before
income taxes 1,671 6,545 (72,975) (10,350) (7,158)
Provision for
income taxes 757 2,630 (4,716) (3,795) (2,994)
---------- ---------- ---------- ---------- ----------
Net income
(loss) 914 3,915 (68,259) (6,555) (4,164)
---------- ---------- ---------- ---------- ----------
Preferred
stock
dividend and
amortization
of preferred
stock
discount 771 754 708 528 445
---------- ---------- ---------- ---------- ----------
Net income
(loss)
available to
common
shareholders 143 3,161 (68,967) (7,083) $ (4,609)
========== ========== ========== ========== ==========
Net income
(loss) per
common share
Basic $ 0.01 $ 0.20 $ (4.28) $ (0.46) $ (0.40)
Diluted $ 0.01 $ 0.20 $ (4.28) $ (0.46) $ (0.40)
Weighted
average
number of
shares
outstanding(1)
Basic 16,134,640 16,129,640 16,129,632 15,322,043 11,536,500
Diluted 16,134,640 16,129,640 16,129,632 15,322,043 11,536,500
(1) excludes unvested shares of restricted stock
Yadkin Valley Financial Corporation
(unaudited)
At or For the Three Months Ended
----------------------------------------------------------
March 31, December 31, September 30, June 30, March 31,
2010 2009 (a) 2009 2009 2009
---------- ---------- ---------- ---------- ----------
Per Share Data:
Basic Earnings
(Loss) per
Share $ 0.01 $ 0.20 $ (4.28) $ (0.46) $ (0.40)
Diluted
Earnings
(Loss) per
Share 0.01 0.20 (4.28) (0.46) (0.40)
Book Value per
Share 6.61 6.58 6.39 10.48 12.63
Cash Dividends
per Share - - - 0.06 0.06
Selected
Performance
Ratios:
Return on
Average Assets
(annualized) 0.03% 0.62% -12.70% -1.38% -1.19%
Return on
Average Equity
(annualized) 0.38% 8.26% -126.74% -13.84% -10.24%
Net Interest
Margin
(annualized) 3.47% 3.83% 3.82% 3.76% 2.87%
Net Interest
Spread
(annualized) 3.25% 3.59% 3.60% 3.45% 2.53%
Non-interest
Income as a %
of Revenue 23.33% 30.02% 97.98% 87.40% 114.23%
Non-interest
Income as a %
of Average
Assets 0.18% 0.31% 0.22% 0.37% 0.32%
Non-interest
Expense as a %
of Average
Assets 0.68% 0.71% 3.62% 0.92% 0.75%
Asset Quality:
Loans 30-89
days past due
(000's) $ 14,297 $ 23,190 $ 20,061 $ 30,319 $ 10,898
Loans over 90
days past due
still accruing
(000's) - 6 - - -
Nonperforming
Loans (000's) 52,870 36,255 47,111 32,008 17,420
Foreclosed real
estate (000's) 16,656 14,345 9,366 7,769 4,318
Nonperforming
Assets (000's) 69,526 50,600 56,477 39,777 21,738
Troubled debt
restructurings
(000's) 5,267 5,544 5,178 - -
Nonperforming
Loans to Total
Loans 3.15% 2.10% 2.75% 1.82% 1.28%
Nonperforming
Assets to
Total Assets 3.16% 2.39% 2.73% 1.84% 1.33%
Allowance for
Loan Losses to
Total Loans 2.70% 2.82% 3.21% 2.62% 2.27%
Allowance for
Loan Losses to
Nonperforming
Loans 86.00% 134.00% 116.00% 144.00% 177.00%
Net
Charge-offs/
Recoveries to
Average Loans
(annualized) 1.83% 2.05% 2.39% 0.27% 0.63%
Capital Ratios:
Equity to Total
Assets 6.94% 7.20% 7.27% 9.43% 11.00%
Tier 1 leverage
ratio(1) 7.76% 8.02% 7.49% 7.87% 8.65%
Tier 1
risk-based
ratio(1) 9.26% 9.00% 8.91% 8.67% 9.71%
Total
risk-based
capital
ratio(1) 10.52% 10.27% 10.18% 9.92% 10.97%
Yadkin Valley Financial Corporation
(unaudited)
At or For the Three Months Ended
----------------------------------------------------------
March 31, December 31, September 30, June 30, March 31,
2010 2009 (a) 2009 2009 2009
---------- ---------- ---------- ---------- ----------
Non-GAAP
disclosures:
Tangible Book
Value per
Share 5.94 5.89 5.68 5.93 7.61
Return on
Tangible
Equity
(annualized) 0.41% 8.93% -191.86% -20.46% -15.08%
Tangible Equity
to Tangible
Assets (2) 6.48% 6.71% 4.49% 4.59% 5.56%
Efficiency
Ratio (3) 68.00% 57.08% 67.02% 73.44% 75.38%
Reconciliation
of GAAP to
Non-GAAP
disclosures
Total Assets
(000's) 2,203,112 2,113,612 2,051,672 2,158,360 1,637,083
Goodwill 4,944 4,944 4,944 66,510 53,503
Core Deposit
Intangible 5,852 6,187 6,525 6,852 4,435
---------- ---------- ---------- ---------- ----------
Tangible Assets
(Non-GAAP) 2,192,316 2,102,481 2,040,203 2,084,998 1,579,145
Total Equity
(000's) 152,936 152,266 149,109 203,469 180,070
Goodwill 4,944 4,944 4,944 66,510 53,503
Core Deposit
Intangible 5,852 6,187 6,525 6,852 4,435
---------- ---------- ---------- ---------- ----------
Tangible Equity
(Non-GAAP) 142,140 141,135 137,640 130,107 122,132
Average equity
(000's) 153,973 151,783 206,860 202,766 182,448
Average
Goodwill and
Core Deposit
Intangible 11,003 11,328 73,900 66,412 58,501
---------- ---------- ---------- ---------- ----------
Average
tangible
equity
(Non-GAAP) 142,970 140,455 132,960 136,354 123,947
Non-interest
expense
(000's) 14,532 14,483 78,746 19,192 11,627
Amortization of
intangibles 334 338 327 350 225
Goowill
impairment - - 61,566 - -
---------- ---------- ---------- ---------- ----------
Adjusted
non-interest
expense
(Non-GAAP) 14,198 14,145 16,853 18,842 11,402
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 shareholders' 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
Average Balance Sheets and Net Interest Income Analysis (Unaudited)
Three Months Ended March 31,
-------------------------------------------------------
2010 2009
------------------------- -------------------------
(Dollars in Thousands)
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
---------- -------- ---- ---------- -------- ----
INTEREST EARNING
ASSETS
Total loans (1,2) $ 632 $ - 0.25% $1,283,418 $ 16,063 5.08%
Federal funds sold 134,627 61 0.18% 4,709 1 0.09%
Investment
securities 180,026 2,018 4.55% 133,439 1,685 5.12%
Interest-bearing
deposits 1,683,199 23,002 5.54% 1,971 11 2.26%
---------- -------- ---------- --------
Total average
earning assets (1) 1,998,484 25,081 5.09% (6) 1,423,537 17,760 5.06%
-------- --------
Noninterest earning
assets 140,599 147,593
---------- ----------
Total average
assets $2,139,083 $1,571,130
========== ==========
INTEREST BEARING
LIABILITIES
Time deposits $1,199,571 $ 6,592 2.23% $ 748,478 $ 6,334 3.43%
Other deposits 441,155 823 0.76% 297,219 727 0.98%
Borrowed funds 121,565 568 1.89% 185,497 625 1.35%
---------- -------- ---------- --------
Total interest
bearing
liabilities 1,762,291 7,983 1.84% (7) 1,231,194 7,686 2.74%
Noninterest bearing
deposits 205,848 148,720
Other liabilities 16,971 8,768
---------- ----------
Total average
liabilities 1,985,110 1,388,682
---------- ----------
Shareholders'
equity 153,973 182,448
Total average
liabilities and
shareholders' ---------- ----------
equity $2,139,083 $1,571,130
========== ==========
NET INTEREST -------- --------
INCOME/YIELD (3,4) $ 17,098 3.47% $ 10,074 2.87%
======== ========
INTEREST SPREAD (5) 3.25% 2.53%
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 2010 includes $571,000 of accretion for purchase
accounting adjustments related to loans acquired in the merger with
American Community.
7. Interest expense for 2010 includes $405,000 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
