ELKIN, NC, Jul. 22, 2010 (Marketwire) --
ELKIN, NC -- (Marketwire) -- 07/22/10 -- Yadkin Valley Financial Corporation (NASDAQ: YAVY)
Second Quarter Financial Highlights:
-- Nonperforming assets decreased to 3.08% of total assets from 3.16% in
the first quarter of 2010
-- Net charge-offs decreased to $6.9 million, or 1.64% of average loans on
an annualized basis, compared to $7.6 million or 1.83% of average loans
on an annualized basis, in the first quarter of 2010
-- Provision for loan losses of $5.8 million, an increase of $1.4 million
compared to the first quarter of 2010
-- Loan loss reserves covered 87% of nonperforming loans, compared to 86%
at March 31, 2010
-- Loan loss reserves decreased slightly to 2.61% of total gross loans, or
2.69% of total loans held for investment, compared to 2.70% of total
gross loans, or 2.74% of total loans held for investment, in the first
quarter of 2010
-- The allowance for impaired loans decreased to $9.4 million from
$12.8 million in the first quarter of 2010
-- Total deposits increased 2% compared to the first quarter of 2010;
total core deposits increased 4%
-- Liquidity ratio improved to 19.5% compared to 17.0% as of
March 31, 2010
-- Leverage ratio, Tier 1 and total capital of 7.53%, 9.39% and 10.65%,
respectively, for the bank
-- Net interest margin was 3.12%, a decrease of 35 basis points compared
to 3.47% in the first quarter
-- Net income decreased to $285,000 from $914,000 in the first quarter;
however, after payment of a dividend to the US Treasury as preferred
shareholder, the net loss available to common shareholders was $486,000
or $0.03 per diluted share
Yadkin Valley Financial Corporation (NASDAQ: YAVY), the holding company for Yadkin Valley Bank and Trust Company, announced that net income for the second quarter 2010 was $285,000. After payment of a dividend to the US Treasury as preferred shareholder, the net loss available to common shareholders for the second quarter of 2010 totaled $486,000 or $0.03 per diluted share. This compares to net income available to common shareholders of $143,000 or $0.01 per diluted share in the first quarter of 2010, and a net loss of $7.1 million, or $0.46 per diluted share, in the second quarter of 2009.
Bill Long, President and CEO commented, "While we still have more work ahead of us in terms of our asset quality, we are encouraged by some of the trends we are seeing in our loan portfolio. Past due loans at our bank subsidiary are at their lowest level in a year. During the second quarter of 2010, we continued to conduct extensive internal reviews of our loans and were able to thoroughly review approximately 40% of the portfolio. This ongoing review process gives us solid visibility on risk migration within the loan portfolio. Over the past twelve months, we charged off $35.1 million in loans. As a result of these continued charge offs and write-downs, combined with the results of our second quarter 2010 loan review, reserves for impaired loans decreased to $9.4 million in the second quarter from $12.8 million in the first quarter. Our reserve coverage remains strong at 87% of nonperforming loans and 2.61% of total gross loans. This strong reserve level together with our seasoned credit administration and experienced special asset teams provides for excellent coverage and management of our portfolio.
"During the second quarter, we maintained our strong liquidity position through continued growth in core deposits, which again provided us with a strong and flexible balance sheet. We believe this strategy remains prudent in the current economic environment. We invested approximately $35.0 million of this liquidity from lower yielding short-term investments into higher yielding investments. This investment, however, was offset by a continued high level of on-balance sheet liquidity as loan demand across our portfolio continues to be soft. During the second half of 2010, we expect to reduce deposit costs through an improved funding mix and a focus on non-interest bearing deposit growth.
"We continue to be pleased with Sidus' performance in such a difficult housing market. Mortgage volumes and the resulting non-interest income increased due to Sidus' continued expansion of its retail and national wholesale operations during the second quarter of 2010. We are optimistic about mortgage production in the second half of this year, as the current mortgage pipeline remains strong.
"Lastly, we remain well capitalized from a regulatory perspective. As we have been doing throughout this credit cycle, we are closely monitoring our capital levels and are continuing to consider options which would improve our capital position."
Second Quarter 2010 Financial Highlights
Asset Quality
Nonperforming loans decreased by $2.0 million to $50.9 million, or 3.00 % of total gross loans, compared to $52.9 million, or 3.15% of total gross loans, as of the first quarter of 2010. The majority of the decrease was related to $7.4 million in loans charged off while $1.8 million was returned to performing status during the quarter.
Nonperforming Loan Analysis
(Dollars in thousands)
-----------------------------------------
June 30, 2010 March 31, 2010
-------------------- --------------------
% of % of
Outstanding Total Outstanding Total
Loan Type Balance Loans Balance Loans
------------------------------- ------------ ------- ------------ -------
Construction/land development $ 8,744 0.51% $ 12,883 0.77%
Residential construction 12,723 0.75% 13,859 0.82%
HELOC 1,652 0.10% 1,612 0.10%
1-4 Family residential 7,084 0.42% 5,647 0.34%
Commercial real estate 15,594 0.92% 13,453 0.80%
Commercial & industrial 4,527 0.27% 4,785 0.28%
Consumer & other 529 0.03% 631 0.04%
------------------------------- ------------ ------- ------------ -------
Total $ 50,853 3.00% $ 52,870 3.15%
------------------------------- ------------ ------- ------------ -------
Other real estate owned (OREO) totaled $18.2 million at the end of the second quarter, up from $16.7 million at the end of the first quarter. The increase in OREO was primarily due to the addition of twenty-seven properties totaling $4.3 million. Total nonperforming assets were $69.0 million or 3.08% of total assets, a slight decrease from $69.5 million or 3.16% of total assets as of March 31, 2010.
During the second quarter of 2010, the provision for loan losses increased $1.4 million to $5.8 million compared to the first quarter. The allowance for loan losses was $44.3 million at June 30, 2010, a modest decrease compared to $45.4 million at March 31, 2010. Out of the $44.3 million in total allowance for loan losses at June 30, 2010, the allowance for impaired loans accounted for $9.4 million, down from $12.8 million at the end of the first quarter. The remaining general allowance, $34.9 million, was attributed to unimpaired loans and was up from $32.6 million at the end of the first quarter.
Net charge-offs totaled $6.9 million, or 1.64% of average loans on an annualized basis, down from $7.6 million, or 1.83% of average loans on an annualized basis, during the first quarter. Loan loss reserves as a percentage of total gross loans decreased slightly to 2.61% from 2.70% in the first quarter, and 2.69% of total loans held for investment from 2.74% in the first quarter. Loan loss reserves totaled 87% of nonperforming loans, up from 86% at the end of the first quarter.
Net Interest Income and Net Interest Margin
Net interest income totaled $15.6 million, a decrease of $1.2 million, or 7.2% compared to the first quarter of 2010. The net interest margin decreased 35 basis points to 3.12% from 3.47%, as $35.0 million in excess liquidity was invested in higher yielding investment securities. These investments were more than offset by a greater level of lower-yielding, short-term investments, as the Company maintained the strong liquidity position that was established during the first quarter. The Company has begun to invest the cash portion of this liquidity and expects the net interest margin to begin to show modest improvement during the second half of 2010. Adjusting assets and liabilities to their fair market values as part of purchase accounting treatment relating to the merger with American Community Bank resulted in a positive impact. Excluding these fair market value adjustments, the core net interest margin was 2.99%, a decrease of 28 basis points compared to 3.27% in the first quarter.
Non-Interest Income
Non-interest income increased 44% to $5.5 million, compared to $3.8 million in the first quarter of 2010. The sequential increase in non-interest income was primarily due to a $76,000 increase in other service fees, a $542,000 increase in net mortgage sale gains, an $800,000 increase in investment securities gains, and a $73,000 increase in other income. The increases in other service fees and net mortgage sale gains were related to an increased level of mortgage volumes at Sidus. The increase in investment securities gains was primarily due to the sale of $29.2 million of investments.
Non-Interest Expense
Non-interest expense increased $448,000, or 3%, to $15.0 million, compared to $14.5 million in the first quarter of 2010. The modest increase in non-interest expense was primarily related to a 4% increase in salaries and employee benefits, a 55% increase in FDIC assessment expense, and a 1% increase in other expense. The increase in salaries and employee benefits and other expense was related to general operations and timing differences. The higher level of FDIC assessment expense was primarily due to a higher deposit base.
Balance Sheet and Capital
Compared to the first quarter of 2010, total gross loans, including loans held for sale, increased $17.0 million, or 1%. The slight increase in total gross loans was primarily due to modest growth in loans originated in the Yadkin and High Country regions. Total deposits increased $44.4 million, or 2%, compared to the first quarter of 2010, and total core deposits increased 4%. Deposit growth was primarily related to a 6% increase in CDs with balances under $100,000, offset by a 3% decrease in CDs with balances over $100,000. Deposit growth, which was primarily the result of officer calling efforts and the Company's continued focus on deposit growth, occurred within all of the Company's markets, and was particularly strong within the High Country market. Brokered CDs and CDARs remain a relatively small portion of the Company's funding sources, as these deposits represented 6% of total deposits at June 30, 2010, consistent with the level as of March 31, 2010.
The bank remains well-capitalized for regulatory purposes. As of June 30, 2010, the bank's Leverage ratio, Tier 1 and total capital were 7.53%, 9.39% and 10.65%, respectively. For capital adequacy purposes, Tier 1, total capital, and leverage ratios must be in excess of 5.00%, 6.00% and 10.00%, respectively to be well capitalized.
Conference Call
Yadkin Valley Financial Corporation will host a conference call at 10:00 a.m. EDT on Thursday, July 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?mediaid=43324&c=YAVY& mediakey=1922814956F76B133EB0B77BD4865CE6&e=0. A replay of the conference call will be available until July 29, 2010, by dialing 877-369-6588 and entering access code 88607109.
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)
(Amounts in thousands except share and per share data)
December September
June 30, March 31, 31, 30, June 30,
2010 2010 2009 (a) 2009 2009
---------- ---------- ---------- ---------- ----------
Assets:
Cash and due
from banks $ 30,178 $ 27,002 $ 31,939 $ 38,902 $ 33,127
Federal funds
sold 6,123 8 93 1 362
Interest-
earning
deposits
with banks 184,592 208,727 60,305 34,784 11,609
U.S.
government
agencies 25,274 39,756 42,894 45,323 45,356
Mortgage-
backed
securities 126,004 72,810 78,389 83,927 89,870
State and
municipal
securities 55,868 59,574 61,378 62,017 60,877
Common and
preferred
stocks 1,134 1,056 1,180 156 126
---------- ---------- ---------- ---------- ----------
Total
investment
securities 208,280 173,196 183,841 191,423 196,229
Construction 333,015 344,138 364,853 370,771 383,787
Commercial,
financial and
other 231,105 265,286 271,433 255,954 264,075
Residential
mortgages 177,887 169,267 169,790 169,755 169,138
Commercial
real estate 648,423 625,394 619,151 604,838 586,438
Installment
loans 49,544 47,112 48,545 45,289 45,250
Revolving 1-4
family loans 207,801 204,834 202,676 199,719 192,409
---------- ---------- ---------- ---------- ----------
Total
Loans 1,647,775 1,656,031 1,676,448 1,646,326 1,641,097
Allowance for
loan losses (44,306) (45,399) (48,625) (54,270) (46,243)
---------- ---------- ---------- ---------- ----------
Net loans 1,603,469 1,610,632 1,627,823 1,592,056 1,594,854
Loans held for
sale 49,542 24,308 49,715 46,911 121,142
Accrued
interest
receivable 7,520 7,866 7,783 7,649 7,380
Bank premises
and equipment 44,434 44,075 43,642 44,272 44,531
Foreclosed
real estate 18,195 16,656 14,345 9,366 7,769
Non-marketable
equity
securities at
cost 10,539 10,539 10,539 10,539 10,539
Investment in
bank-owned
life
insurance 24,852 24,660 24,454 24,308 24,073
Goodwill 4,944 4,944 4,944 4,944 66,510
Core deposit
intangible 5,527 5,852 6,186 6,525 6,852
Other assets 41,986 44,647 48,003 39,992 33,383
---------- ---------- ---------- ---------- ----------
Total
assets $2,240,181 $2,203,112 $2,113,612 $2,051,672 $2,158,360
========== ========== ========== ========== ==========
Liabilities
and
shareholders'
equity
Deposits:
Non-interest
bearing $ 210,940 $ 211,272 $ 207,850 $ 205,674 $ 201,846
NOW, savings
and money
market
accounts 468,773 455,189 445,508 413,694 396,239
Time
certificates:
$100,000 or
more 516,146 529,253 560,825 549,493 554,704
Other 757,579 713,351 607,569 577,884 625,371
---------- ---------- ---------- ---------- ----------
Total
deposits 1,953,438 1,909,065 1,821,752 1,746,745 1,778,160
Borrowings 118,621 126,600 123,467 136,266 152,756
Accrued
expenses and
other
liabilities 15,409 14,511 16,127 19,552 23,975
---------- ---------- ---------- ---------- ----------
Total
liabilities 2,087,468 2,050,176 1,961,346 1,902,563 1,954,891
Total
shareholders'
equity 152,713 152,936 152,266 149,109 203,469
---------- ---------- ---------- ---------- ----------
Total
liabilities
and
shareholders'
equity $2,240,181 $2,203,112 $2,113,612 $2,051,672 $2,158,360
========== ========== ========== ========== ==========
Period End
Shares
Outstanding 16,144,640 16,134,640 16,129,640 16,129,640 16,129,640
(a) Derived from audited consolidated financial statements
Yadkin Valley Financial Corporation
Consolidated Income Statements (Unaudited)
(Amounts in thousands except share and per share data)
December September
Three months June 30, March 31, 31, 30, June 30,
ended 2010 2010 2009 2009 2009
---------- ---------- ---------- ---------- ----------
Interest and
fees on loans $ 22,458 $ 22,958 $ 23,627 $ 24,731 $ 23,936
Interest on
securities 1,661 1,771 1,839 1,877 1,876
Interest on
federal funds
sold 2 - 4 19 1
Interest-
bearing
deposits 126 61 13 10 10
---------- ---------- ---------- ---------- ----------
Total
interest
income 24,247 24,790 25,483 26,637 25,823
---------- ---------- ---------- ---------- ----------
Time deposits
of $100,000
or more 3,274 3,361 3,273 4,517 3,734
Other deposits 4,781 4,055 3,642 3,005 3,753
Borrowed funds 595 567 706 734 782
---------- ---------- ---------- ---------- ----------
Total
interest
expense 8,650 7,983 7,621 8,256 8,269
---------- ---------- ---------- ---------- ----------
Net interest
income 15,597 16,807 17,862 18,381 17,554
Provision for
loan losses 5,809 4,384 3,146 18,286 16,457
---------- ---------- ---------- ---------- ----------
Net interest
income after
provision
for loan
losses 9,788 12,423 14,716 95 1,097
---------- ---------- ---------- ---------- ----------
Non-interest
income
Service
charges on
deposit
accounts 1,486 1,437 1,572 1,577 1,535
Other service
fees 917 841 1,250 1,189 1,365
Net gain on
sales of
mortgage
loans 1,876 1,334 2,812 2,751 4,802
Income on
investment
in bank
owned life
insurance 192 207 145 235 234
Mortgage
banking
operations 60 56 486 7 (207)
Gains on sale
of
securities 844 44 - - -
Other than
temporary
impairment
of
investments (61) (205) (17) (175) -
Other 140 66 64 94 16
---------- ---------- ---------- ---------- ----------
Total
non-
interest
income 5,454 3,780 6,312 5,678 7,745
---------- ---------- ---------- ---------- ----------
Non-interest
expense
Salaries
and
employee
benefits 6,941 6,663 6,938 7,762 8,299
Occupancy
and
equipment 1,957 1,966 1,865 1,858 1,842
Printing
and
supplies 259 274 273 345 272
Data
processing 384 313 489 349 427
Communicat-
ion expen-
se 436 459 448 372 330
Advertising
and
marketing 204 178 414 357 213
Amortization
of core
deposit
intangible 325 334 338 327 350
FDIC
assessment
expense 1,288 830 619 973 1,797
Attorney
fees 148 75 112 469 409
Loan
collection
expense 289 272 637 370 161
Goodwill
impairment - - - 61,566 -
Net loss on
other real
estate
owned 402 796 189 1,218 138
Other 2,347 2,372 2,161 2,782 4,954
---------- ---------- ---------- ---------- ----------
Total
non-interest
expense 14,980 14,532 14,483 78,748 19,192
---------- ---------- ---------- ---------- ----------
Income before
income taxes 262 1,671 6,545 (72,975) (10,350)
Provision for
income taxes (23) 757 2,630 (4,716) (3,795)
---------- ---------- ---------- ---------- ----------
Net income
(loss) 285 914 3,915 (68,259) (6,555)
---------- ---------- ---------- ---------- ----------
Preferred
stock
dividend
and
amortization
of
preferred
stock
discount 771 771 754 708 528
---------- ---------- ---------- ---------- ----------
Net income
(loss)
available to
common
shareholders $ (486) $ 143 $ 3,161 $ (68,967) $ (7,083)
========== ========== ========== ========== ==========
Basic $ (0.03) $ 0.01 $ 0.20 $ (4.28) $ (0.46)
Diluted $ (0.03) $ 0.01 $ 0.20 $ (4.28) $ (0.46)
Weighted
average
number of
shares
outstanding
Basic 16,129,640 16,129,640 16,129,640 16,129,632 15,322,043
Diluted 16,129,640 16,129,640 16,129,640 16,129,632 15,322,043
Yadkin Valley Financial Corporation
(unaudited)
At or For the Three Months Ended
-----------------------------------------------------
December September
June 30, March 31, 31, 30, June 30,
2010 2010 2009 (a) 2009 2009
--------- --------- --------- --------- ---------
Per Share Data:
Basic Earnings
(Loss) per Share $ (0.03) $ 0.01 $ 0.20 $ (4.28) $ (0.46)
Diluted Earnings
(Loss) per Share (0.03) 0.01 0.20 (4.28) (0.46)
Book Value per Share 6.59 6.61 6.58 6.39 10.48
Cash Dividends per
Share - - - - 0.06
Selected Performance
Ratios:
Return on Average
Assets (annualized) -0.04% 0.03% 0.62% -12.70% -1.38%
Return on Average
Equity (annualized) -0.50% 0.38% 8.26% -126.74% -13.84%
Net Interest Margin
(annualized) 3.12% 3.47% 3.83% 3.82% 3.76%
Net Interest Spread
(annualized) 2.84% 3.25% 3.59% 3.60% 3.45%
Non-interest Income
as a % of Revenue 34.76% 23.33% 30.02% 97.98% 87.40%
Non-interest Income
as a % of Average
Assets 0.25% 0.18% 0.31% 0.22% 0.37%
Non-interest Expense
as a % of Average
Assets 0.67% 0.68% 0.71% 3.62% 0.92%
Asset Quality:
Loans 30-89 days
past due (000's) $ 16,163 $ 14,297 $ 23,190 $ 20,061 $ 30,319
Loans over 90 days
past due still
accruing (000's) - - 6 - -
Nonperforming Loans
(000's) 50,853 52,870 36,255 47,111 32,008
Other Real Estate
Owned (000's) 18,195 16,656 14,345 9,366 7,769
Nonperforming Assets
(000's) 69,048 69,526 50,600 56,477 39,777
Troubled debt
restructurings
(000's) 8,184 5,267 5,544 5,178 -
Nonperforming Loans
to Total Loans 3.00% 3.15% 2.10% 2.75% 1.82%
Nonperforming Assets
to Total Assets 3.08% 3.16% 2.39% 2.73% 1.84%
Allowance for Loan
Losses to Total
Loans 2.61% 2.70% 2.82% 3.21% 2.62%
Allowance for Loan
Losses to
Nonperforming Loans 87.12% 86.00% 134.00% 116.00% 144.00%
Net Charge-offs/
Recoveries to Average
Loans (annualized) 1.64% 1.83% 2.05% 2.39% 0.27%
Capital Ratios:
Equity to Total
Assets 6.82% 6.94% 7.20% 7.27% 9.43%
Tier 1 leverage
ratio(1) 7.53% 7.76% 8.16% 7.49% 7.87%
Tier 1 risk-based
ratio(1) 9.39% 9.26% 9.16% 8.91% 8.67%
Total risk-based
capital ratio(1) 10.65% 10.52% 10.43% 10.18% 9.92%
Non-GAAP
disclosures(2):
Tangible Book Value
per Share 5.94 5.94 5.89 5.68 5.93
Return on Tangible
Equity (annualized)
(3) -0.54% 0.41% 8.93% -191.86% -20.46%
Tangible Equity to
Tangible Assets (3) 6.38% 6.48% 6.71% 4.49% 4.59%
Efficiency Ratio (4) 67.36% 68.00% 57.08% 67.02% 73.44%
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
it is 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 provides 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 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
(4) 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 June 30,
-------------------------------------------------------------
2010 2009
---------------------------- ----------------------------
(Dollars in Thousands)
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
----------- -------- ------ ----------- -------- ------
INTEREST
EARNING
ASSETS
Total loans
(1,2) $ 1,687,810 $ 22,501 5.35% $ 1,691,622 $ 23,974 5.68%
Federal funds
sold 2,896 2 0.25% 3,946 1 0.10%
Investment
securities 180,909 1,884 4.18% 200,218 2,146 4.30%
Interest-
bearing
deposits 210,307 126 0.24% 10,287 10 0.39%
----------- -------- ----------- --------
Total average
earning
assets (1) 2,081,923 24,512 4.72% (6) 1,906,073 26,131 5.50%
-------- --------
Noninterest
earning
assets 137,781 156,713
----------- -----------
Total average
assets $ 2,219,704 $ 2,062,786
=========== ===========
INTEREST
BEARING
LIABILITIES
Time
deposits $ 1,261,674 $ 7,197 2.29% $ 1,076,689 $ 6,642 2.47%
Other
deposits 458,344 858 0.75% 390,228 845 0.87%
Borrowed
funds 121,950 595 1.96% 152,875 782 2.05%
----------- -------- ----------- --------
Total
interest
bearing
liabilities 1,841,968 8,650 1.88% (7) 1,619,792 8,269 2.05%
Noninterest
bearing
deposits 206,328 190,726
Other
liabilities 17,070 16,677
----------- -----------
Total average
liabilities 2,065,366 1,827,195
----------- -----------
Shareholders'
equity 154,338 235,591
----------- -----------
Total average
liabilities
and
shareholders'
equity $ 2,219,704 $ 2,062,786
=========== ===========
-------- --------
NET INTEREST
INCOME/YIELD
(3,4) $ 15,862 3.12% $ 17,862 3.76%
======== ========
INTEREST
SPREAD (5) 2.84% 3.45%
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 and 2009 includes $450 and $2,624, respectively
of accretion for purchase accounting adjustments related to loans
acquired in the merger with American Community.
7. Interest expense for 2010 and 2009 includes $215 and $172, respectively
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)
Six Months Ended June 30,
-------------------------------------------------------------
2010 2009
---------------------------- ----------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
----------- -------- ------ ----------- -------- ------
INTEREST
EARNING
ASSETS
Total loans
(1,2) $ 1,685,544 $ 45,503 5.44% $ 1,488,518 $ 40,037 5.42%
Federal funds
sold 1,771 2 0.25% 4,309 2 0.09%
Investment
securities 180,470 3,904 4.36% 172,262 3,832 4.49%
Interest-
bearing
deposits 172,680 181 0.21% 6,199 21 0.68%
----------- -------- ----------- --------
Total average
earning
assets (1) 2,040,465 49,589 4.90% (6) 1,671,288 43,892 5.30%
-------- --------
Noninterest
earning
assets 139,285 149,294
----------- -----------
Total average
assets $ 2,179,749 $ 1,820,582
=========== ===========
INTEREST
BEARING
LIABILITIES
Time
deposits $ 1,230,794 $ 13,789 2.26% $ 912,012 $ 12,976 2.87%
Other
deposits 449,797 1,682 0.75% 338,990 1,572 0.94%
Borrowed
funds 121,758 1,163 1.93% 185,754 1,407 1.53%
----------- -------- ----------- --------
Total
interest
bearing
liabilities 1,802,349 16,633 1.86% (7) 1,436,756 15,955 2.24%
Noninterest
bearing
deposits 206,090 168,093
Other
liabilities 17,114 12,967
----------- -----------
Total average
liabilities 2,025,553 1,617,816
----------- -----------
Shareholders'
equity 154,196 202,766
----------- -----------
Total average
liabilities
and
shareholders'
equity $ 2,179,749 $ 1,820,582
=========== ===========
-------- --------
NET INTEREST
INCOME/YIELD
(3,4) $ 32,956 3.28% $ 27,937 3.37%
======== ========
INTEREST
SPREAD (5) 3.04% 3.06%
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 and 2009 includes $1,021 and $2,414,
respectively of accretion for purchase accounting adjustments related to
loans acquired in the merger with American Community.
7. Interest expense for 2010 and 2009 includes $621 and $172, respectively
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
