|
| ||||||||||||||
Yadkin Valley Financial Corporation Announces Third Quarter 2008 Results ELKIN, NC--(MARKET WIRE)--Nov 7, 2008 -- Yadkin Valley Financial Corporation (NasdaqGS:YAVY - News) Third Quarter Highlights:
-- Stable net interest margin of 3.33% compared to 3.34% during the
second quarter of 2008
-- Provision for loan losses of $1.3 million, a decrease of 22% compared
to the second quarter of 2008
-- Nonperforming loans of 0.83% of total loans, up from 0.43% during the
second quarter of 2008
-- Net charge-offs of 0.24% of average loans (annualized), up from 0.14%
during the second quarter of 2008
-- Loan loss reserves of 1.42% of total loans, compared to 1.41% in the
second quarter of 2008
-- Tier one, total capital, and leverage ratios of 9.40%, 10.65%, and
8.36%, respectively (at bank subsidiary level); tangible equity ratio of
6.67%
-- Net income of $1.8 million or $0.15 per diluted share
-- Loans held for investment increased 4% sequentially, or 14% on an
annualized basis
Yadkin Valley Financial Corporation (NasdaqGS:YAVY - News), the holding company for Yadkin Valley Bank and Trust Company, announced financial results for the third quarter ending September 30, 2008. Net income was $1.8 million or $0.15 per diluted share, compared to net income of $3.9 million or $0.37 per diluted share in the third quarter of 2007. Included in the third quarter 2008 results was a $972,800 pretax other than temporary impairment charge on investments in Federal Home Loan Mortgage ("Freddie Mac") perpetual preferred securities. Excluding this charge, diluted earnings per share were $0.21. The Company also announced that it has adjusted its second quarter 2008 results originally reported on August 11, 2008. As a result of a clerical error, the provision for loan losses during the second quarter of 2008 was restated to $1.7 million compared with the $1.1 million previously reported. After adjusting for the additional loan loss provision of $0.6 million, net income for the second quarter 2008 was $1.7 million or $0.15 per diluted share compared to the $2.1 million or $0.19 per diluted share as previously reported. Bill Long, President and CEO, commented, "I am pleased with our third quarter performance in light of the challenging economic environment. While nonperforming loans rose moderately, the majority of the increase was related to one commercial relationship totaling approximately $3.8 million, which we have been monitoring very closely for the past few quarters. The borrower's business is related to the construction industry, which has experienced a downturn following the slowing housing market and economic conditions. By placing this relationship on nonaccrual status, we have taken a very conservative and proactive approach to managing this credit even though the borrower continues to pay as agreed. We believe we have taken adequate reserves against this relationship, and that it is well-secured." "We believe our asset quality continues to outperform our peers. During the third quarter of 2008, our nonperforming loans as a percentage of total loans were 0.83%, nonperforming assets as a percentage of total assets were 0.86%, and net charge-offs were 0.24% of average loans. By comparison, our peer group showed, on average, nonperforming loans as a percentage of total loans of 1.42%, nonperforming assets as a percentage of total assets of 1.31%, and net charge-offs of 0.42% of average loans during the third quarter of 2008. Nevertheless, Yadkin Valley's loan loss reserves of 1.42% of total loans are only slightly below the peer average of 1.50% of total loans. We continue to take a conservative and proactive approach to managing nonperforming loans, even though approximately 57% of our nonaccrual loans are currently paying as agreed. Loans 30-89 days past due actually decreased slightly between the second and third quarters of 2008. As the economic conditions across our markets have slowed and the housing market continues to soften, we anticipate that our nonperforming loans will remain higher than historical levels, yet manageable, during the fourth quarter. However, we anticipate that our asset quality will continue to outperform our peers during the fourth quarter of 2008." "With the 100 basis point decrease in the prime rate during October, we anticipate that our net interest margin will contract during the fourth quarter of 2008. Approximately 45% of our loans are variable rate and prime-based. Our deposit costs have decreased somewhat as CDs have re-priced at lower rates, and loan pricing has become more attractive across our markets as many of our competitors have slowed or stopped lending to small and mid-sized businesses. These two factors should somewhat mitigate the effects of the recent decrease in the prime rate on our net interest margin during the fourth quarter of 2008. While there are many opportunities before us that have been created through the continued turmoil in the financial markets, we remain selective in pursuing new relationships." "We intend to participate in the Treasury's Capital Purchase Program, a program that we believe is intended for strong financial institutions well-positioned for growth during this difficult economic cycle, and we expect to apply for the maximum of 3% of total risk-weighted assets. This translates to approximately $35 to $37 million in additional capital. Although without additional capital we remain strong from a regulatory perspective, we view this program as an attractively priced opportunity that will allow us to more aggressively capitalize on current market opportunities across our footprint." "We are excited about the merger with American Community, and the integration process has already begun. We are on track to close the acquisition before the end of the first quarter of 2009, as originally announced. We believe that our merger with American Community Bancshares brings a number of advantages to Yadkin Valley Financial, including the opportunity for quality asset growth and profitability, a relatively smooth integration process due to similar cultures, and the further expansion into the Charlotte/Mecklenburg region, which is considered one of the most demographically attractive markets in the nation." THIRD QUARTER 2008 FINANCIAL HIGHLIGHTS Net Interest Income and Net Interest Margin Net interest income was $10.6 million, compared to $10.7 million in the third quarter of 2007. The decrease in net interest income on a year-over-year basis was primarily due to the 275 basis point decrease in the prime rate, which had a more immediate effect upon variable rate loans, offset by the increase in loans obtained through the Cardinal State Bank acquisition in the first quarter of 2008. The net interest margin decreased 91 basis points to 3.33% compared to 4.24% in the third quarter of 2007. Compared to the second quarter of 2008, net interest income increased 2%. The sequential increase in net interest income was primarily due to a 2% increase in average earning assets. The net interest margin was relatively stable, decreasing to 3.33% from 3.34% in the second quarter of 2008. Non-Interest Income Non-interest income decreased by 14% to $3.1 million, compared to $3.6 million in the third quarter of 2007, and by 24% compared to the second quarter of 2008. The year-over-year and sequential decreases were primarily due to the $972,800 pretax other than temporary impairment charge on investments in Freddie Mac perpetual preferred securities. Excluding this charge, non-interest income would have increased 13% compared to the third quarter of 2007 and decreased slightly compared to the second quarter of 2008. Also included in non-interest income during the quarter was a $105,000 other loss associated primarily with the sale of other real estate owned. Non-Interest Expense Non-interest expense increased 22% to $9.8 million, compared to $8.0 million in the third quarter of 2007. The year-over-year increase was largely due to higher salary and benefits expense associated with the Cardinal State Bank acquisition as well as an increase in occupancy expense. The increase in occupancy expense reflects the additional expenses associated with the Cardinal acquisition as well as the opening of two new branches during this time period. Compared to the second quarter of 2008, non-interest expenses decreased 4%, primarily due to a 14% decrease in other expenses. The decrease reflects $500,000 in non-recurring legal expenses that were recorded during the second quarter of 2008. Balance Sheet Growth Total assets increased $325.4 million, or 28% compared to the third quarter of 2007. Total loans increased $261.7 million, or 31%, and total deposits grew $158.8 million, or 17% compared to the third quarter of 2007. The increase in assets, loans, and deposits on a year-over-year basis was primarily due to the acquisition of Cardinal State Bank. Excluding the Cardinal acquisition, assets increased 9%, loans increased 13%, and deposits decreased 1% year-over-year. Compared to the second quarter of 2008, total assets, loans, and deposits increased 11%, 14%, and 4%, respectively, on an annualized basis. The increase in loans was largely driven by growth in commercial real estate as well as commercial and industrial loans, particularly within the High Country and Piedmont markets. Deposit growth was primarily due to deposit campaigns offering competitive rates across the Company's markets, and was strongest in the company's Yadkin and Cardinal regions. Both sequential loan and deposit growth was largely affected by the significant market disruption that occurred during September. Asset Quality Nonperforming loans increased by $4.8 million to $9.7 million or 0.83% of total loans compared to $4.8 million or 0.43% of total loans as of the second quarter of 2008. The majority of the increase was due to one $3.8 million commercial relationship added to nonaccruals during the third quarter of 2008. The relationship is related to the lumber industry, which has experienced a downturn following the slowdown in residential construction. As a result of continued weakness in the housing market, as well as slower economic conditions, the loan was placed on nonaccrual status, even though it continues to pay as agreed. The following chart highlights nonperforming loans by loan category, and as a percentage of total loans:
Nonperforming Loan Analysis
(Dollars in thousands)
--------------------------------------------
Third Quarter 2008 Second Quarter 2008
--------------------- ---------------------
% of % of
Outstanding Total Outstanding Total
Loan Type Balance Loans Balance Loans
------------ ------- ------------ -------
Construction/land development $ 1,881 0.16% $ 882 0.08%
Residential construction 855 0.07% 1,633 0.15%
HELOC 708 0.06% 346 0.03%
1-4 Family residential 722 0.06% 482 0.04%
Multifamily residential 103 0.01% 26 0.00%
Commercial real estate 542 0.05% 430 0.04%
Commercial & industrial 4,603 0.40% 951 0.08%
Consumer & other 253 0.02% 81 0.01%
------------ ------- ------------ -------
Total $ 9,667 0.83% $ 4,831 0.43%
------------ ------- ------------ -------Other real estate owned (OREO) was $3.0 million at the end of the third quarter of 2008 compared to $2.1 million in the second quarter of 2008. The increase in OREO was primarily due to the addition of two newly constructed homes valued at $1.5 million. Total nonperforming assets were $12.7 million or 0.86% of total assets as of September 30, 2008, up from $6.9 million or 0.48% in the second quarter of 2008. During the third quarter of 2008, net charge-offs totaled 0.24% of average loans on an annualized basis, compared to 0.14% during the second quarter of 2008. Loan loss reserves as a percentage of total loans were 1.42%, a slight increase from 1.41% in the second quarter of 2008. Capital The bank remains well-capitalized for regulatory purposes. As of September 30, 2008, the total capital ratio was 10.65%, tier one ratio was 9.40%, and leverage ratio was 8.36% (at the bank subsidiary level). This compares to a total capital ratio of 10.54%, tier one ratio of 9.41%, and leverage ratio of 8.53% as of the third quarter of 2007. Tangible equity as a percentage of tangible assets was 6.64%, compared to 8.47% during the same period in 2007, and 6.63% during the second quarter of 2008. Conference Call Yadkin Valley Financial will host a conference call today at 10:00 a.m. EST to discuss third quarter 2008 financial results. The call may be accessed by dialing 800-762-8795 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=34032&c=YAVY&mediakey=2EC97FB1512FA3AAE1D4A35451126E83&e=0 (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.) 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 30 branches throughout its four regions in North Carolina. The Yadkin Valley Bank region serves Ashe, Forsyth, Surry, Wilkes, and Yadkin Counties, and operates a loan production office in Wilmington, NC. 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 Bank provides mortgage lending services through its subsidiary, Sidus Financial, LLC, headquartered in Greenville, North Carolina. Securities brokerage services are provided by Main Street Investment Services, Inc., a Bank subsidiary with four offices located in the branch network. Certain statements in this press release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements concerning our future growth, plans, objectives, expectations, performance, events and the like, as well as any other statements, including those regarding the proposed merger, that are not historical facts and are thus prospective. Such forward-looking statements are subject to risks, uncertainties, and other factors, including, but not limited to: the businesses of Yadkin Valley and American Community may not be integrated successfully or such integration may take longer to accomplish than expected; disruption from the merger may make it more difficult to maintain relationships with clients, associates, or suppliers; the required governmental approvals of the merger may not be obtained on the proposed terms and schedule; shareholders may not approve the merger; continued disruption in worldwide and U.S. economic conditions; changes in the interest rate environment which may reduce the net interest margin; a continued downturn in the economy or real estate market; greater than expected noninterest expenses or excessive loan losses as a result of changes in market conditions and the adverse impact on the value of the underlying collateral and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. For a more detailed description of factors that could cause or contribute to such differences, please see Yadkin Valley's and American Community's filings with the Securities and Exchange Commission. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. These projections and statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable though they are inherently uncertain and difficult to predict. 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 either company or any person that the future events, plans, or expectations contemplated by either company will be achieved. Yadkin Valley and American Community do not intend to and assume no responsibility for updating or revising any forward-looking statement contained in this press release, whether as a result of new information, future events or otherwise.
Yadkin Valley Financial Corporation
(Amounts in thousands except per share data)
(unaudited)
For the Three Months Ended
September June September
30, 30, 30,
2008 2008 2007
(restated)
Interest Income:
Interest and fees on loans $ 17,552 $ 17,224 $ 17,369
Interest on federal funds sold 8 26 99
Interest on taxable securities 1,335 1,344 1,407
Interest on tax-exempt securities 382 373 309
Interest-bearing deposits 161 134 47
--------- --------- ---------
Interest income 19,438 19,101 19,231
Interest expense 8,813 8,728 8,503
--------- --------- ---------
Net interest income 10,625 10,373 10,728
Provision for loan losses 1,334 1,708 300
--------- --------- ---------
Net interest income after provision
for loan loss 9,291 8,665 10,427
--------- --------- ---------
Noninterest Income:
Service charges on deposit accounts 1,172 1,066 1,003
Other service fees 858 877 863
Net gain on sales of mortgage loans 1,872 1,785 1,338
Net gain on sales of investment securities (966) (7) 45
Income on investment in bank owned life
Insurance 238 235 255
Mortgage banking income (11) 68 64
Other income (105) 23 (11)
--------- --------- ---------
Total noninterest income 3,058 4,047 3,556
--------- --------- ---------
Noninterest Expense:
Salaries and employee benefits 5,136 5,048 4,625
Occupancy and equipment expense 1,307 1,294 985
Printing and supplies 176 196 127
Data processing 217 271 105
Communications expense 272 278 337
Amortization of core deposit intangible 229 235 194
Other expense 2,424 2,831 1,643
--------- --------- ---------
Total noninterest expense 9,761 10,153 8,016
--------- --------- ---------
Income before income taxes 2,588 2,559 5,967
Income taxes 795 832 2,045
--------- --------- ---------
Net income $ 1,793 $ 1,727 $ 3,922
========= ========= =========
Income per share:
Basic $ 0.16 $ 0.15 $ 0.37
Diluted $ 0.15 $ 0.15 $ 0.37
Average shares outstanding – basic 11,525 11,493 10,584
Average shares outstanding – diluted 11,583 11,526 10,721
Yadkin Valley Financial Corporation
(Amounts in thousands except per share data)
(unaudited)
For the For the
Nine Months Ended Six Months Ended
September 30, June 30,
2008 2007 2008
(restated)
Interest income $ 56,443 $ 55,854 $ 37,004
Interest expense 26,088 24,501 17,274
-------- -------- --------
Net interest income 30,355 31,353 19,730
Provision for loan losses 3,492 800 2,158
-------- -------- --------
Net interest income after provision
for loan loss 26,863 30,553 17,572
-------- -------- --------
Noninterest Income:
Service charges on deposit accounts 3,246 2,938 2,075
Other service fees 2,599 2,719 1,741
Net gain on sales of mortgage loans 5,429 4,394 3,557
Net gain on sales of investment
securities (972) 45 (7)
Income on investment in bank owned
life Insurance 706 785 468
Mortgage banking income 67 276 78
Other income (41) 590 65
-------- -------- --------
Total noninterest income 11,034 11,748 7,976
-------- -------- --------
Noninterest Expense:
Salaries and employee benefits 15,052 14,453 9,916
Occupancy and equipment expense 3,578 2,987 2,271
Printing and supplies 557 409 381
Data processing 600 315 383
Communications expense 758 934 486
Amortization of core deposit
intangible 652 589 422
Other expense 7,360 5,275 4,935
-------- -------- --------
Total noninterest expense 28,556 24,964 18,795
-------- -------- --------
Income before income taxes 9,341 17,337 6,753
Income taxes 2,907 5,716 2,112
-------- -------- --------
Net income $ 6,434 $ 11,621 $ 4,641
======== ======== ========
Income per share:
Basic $ 0.57 $ 1.10 $ 0.42
Diluted $ 0.57 $ 1.08 $ 0.42
Average shares outstanding – basic 11,199 10,604 11,033
Average shares outstanding – diluted 11,276 10,782 11,093
Yadkin Valley Financial Corporation
(Amounts in thousands except per share data)
(unaudited)
As of Sep 30, As of Jun 30, As of Dec 31,
2008 2008 2007*
(restated)
Assets
Cash and due from banks $ 26,574 $ 28,403 $ 24,268
Federal funds sold and
interest-bearing deposits 12,547 14,245 2,058
Securities available for sale 140,709 141,198 142,484
Gross loans held for investment 1,118,619 1,076,513 898,753
Allowance for loan losses (16,526) (15,879) (12,446)
---------- ---------- ----------
Net loans held for investment 1,102,093 1,060,634 886,307
Loans held for sale 44,841 47,143 52,754
Accrued interest receivable 6,284 5,891 6,055
Premises and equipment, net 32,948 33,029 26,780
Federal Home Loan Bank stock 7,689 6,767 2,557
Investment in bank-owned life
insurance 23,386 23,149 22,683
Goodwill 54,149 54,033 32,697
Core deposit intangible 4,886 5,114 4,261
Other assets 13,274 11,495 8,173
---------- ---------- ----------
Total Assets $1,469,380 $1,431,101 $1,211,077
========== ========== ==========
Liabilities and Stockholders’ Equity
Non-interest bearing deposits $ 157,549 $ 165,056 $ 154,979
NOW, savings, and money market 278,827 283,404 232,888
Time deposits over $100,000 285,162 276,957 267,530
Other time deposits 386,357 371,302 308,045
---------- ---------- ----------
Total deposits 1,107,895 1,096,719 963,442
Borrowed funds 198,209 172,966 104,199
Accrued interest payable 3,370 3,382 3,435
Other liabilities 7,249 8,305 6,732
---------- ---------- ----------
Total Liabilities 1,316,723 1,281,372 1,077,808
Stockholders’ equity 152,656 149,729 133,269
---------- ---------- ----------
Total Liabilities and
Stockholders’ Equity $1,469,380 $1,431,101 $1,211,077
========== ========== ==========
Shares outstanding at end
of period 11,533 11,516 10,563
* Note: Derived from audited financial statements
Yadkin Valley Financial Corporation
(unaudited)
For the Three Months Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sept 30,
2008 2008 2008 2007 2007
(restated)
Per Share Data:
Basic Earnings per Share $ 0.16 $ 0.15 $ 0.28 $ 0.29 $ 0.37
Diluted Earnings per Share $ 0.15 $ 0.15 $ 0.27 $ 0.29 $ 0.37
Book Value per Share $ 13.24 $ 13.00 $ 13.16 $ 12.62 $ 12.38
Tangible Book Value per Share $ 8.12 $ 7.87 $ 8.12 $ 9.12 $ 8.87
Cash Dividends per Share $ 0.13 $ 0.13 $ 0.13 $ 0.13 $ 0.13
Selected Performance Ratios:
Return on Average Assets
(annualized) 0.49% 0.49% 0.98% 1.04% 1.38%
Return on Average Equity
(annualized) 4.66% 4.57% 8.55% 9.14% 11.94%
Return on Tangible Equity
(annualized) 7.61% 7.45% 11.75% 12.66% 16.72%
Net Interest Margin
(annualized) 3.33% 3.34% 3.56% 4.03% 4.24%
Net Interest Spread
(annualized) 2.90% 2.87% 2.94% 3.30% 3.52%
Noninterest Income as a % of
Revenue 24.76% 31.84% 30.61% 26.45% 25.43%
Noninterest Income as a % of
Average Assets 0.21% 0.29% 0.33% 0.32% 0.32%
Noninterest Expense as a % of
Average Assets 0.68% 0.72% 0.73% 0.69% 0.71%
Net Noninterest income as a %
of Average Assets -0.47% -0.43% -0.40% -0.37% -0.40%
Efficiency Ratio 68.64% 67.82% 62.68% 54.12% 54.10%
Asset Quality:
Nonperforming Loans (000’s) 9,667 4,830 4,992 1,962 1,682
Nonperforming Assets (000’s) 12,668 6,945 7,289 2,564 2,630
Nonperforming Loans to Total
Loans 0.83% 0.43% 0.48% 0.21% 0.19%
Nonperforming Assets to Total
Assets 0.86% 0.49% 0.51% 0.21% 0.23%
Allowance for Loan Losses to
Total Loans Held For
Investment 1.48% 1.48% 1.40% 1.38% 1.32%
Allowance for Loan Losses to
Nonperforming Loans 171% 329% 292% 634% 668%
Net Charge-offs/Recoveries to
Average Loans (annualized) 0.24% 0.14% (0.01)% 0.21% 0.16%
Capital Ratios:
Equity to Total Assets 10.39% 10.46% 10.58% 11.01% 11.45%
Tangible Equity to Tangible
Assets 6.64% 6.60% 6.80% 8.21% 8.47%
Tier 1 leverage ratio(1) 8.36% 8.40% 10.07% 8.41% 8.53%
Tier 1 risk-based ratio(1) 9.40% 9.34% 9.50% 9.16% 9.41%
Total risk-based capital
ratio(1) 10.65% 10.59% 10.74% 10.36% 10.54%
Note: (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
Yadkin Valley Financial Corporation
(unaudited)
For
the
For the Nine Months Six
Ended Months
Sep Sep Sep Ended
30, 30, 30, Jun 30,
2008 2007 2006 2008
(restated)
Selected Performance Ratios:
Return on Average Assets (annualized) 0.64% 1.40% 1.28% 0.72%
Return on Average Equity (annualized) 5.87% 12.08% 11.25% 6.45%
Return on Tangible Equity (annualized) 8.64% 17.04% 16.50% 9.72%
Net Interest Margin 3.39% 4.26% 4.48% 3.44%
Net Interest Spread 2.89% 3.55% 3.91% 2.87%
Noninterest Income as a % of Revenue 29.12% 27.77% 26.79% 31.22%
Noninterest Income as a % of Average Assets 0.82% 1.06% 1.01% 0.61%
Noninterest Expense as a % of Average
Assets 2.12% 2.25% 2.31% 1.44%
Net Noninterest income as a % of Average
Assets -1.30% -1.19% -1.30% -0.83%
Efficiency Ratio 66.44% 55.90% 56.41% 65.36%
Asset Quality:
Net Charge-offs to Average Loans
(annualized) 0.13% 0.06% 0.08% 0.07%
Yadkin Valley Financial Corporation Average
Balance Sheets and Net Interest Income Analysis
(Dollars in Thousands)
(Unaudited)
Three Months Ended: September 30, 2008 September 30, 2007
------------------------ ------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
---------- ------- ---- ---------- ------- ----
INTEREST EARNING ASSETS
Federal funds sold $ 1,659 $ 8 1.91% $ 7,571 $ 99 5.19%
Interest bearing deposits 13,642 161 4.68% 3,977 47 4.69%
Investment securities (1) 139,266 1,885 5.37% 142,941 1,852 5.14%
Total loans (1,2) 1,137,645 17,589 6.13% 865,254 17,409 7.98%
---------- ------- ---------- -------
Total average earning
assets (1) 1,292,212 19,643 6.03% 1,019,743 19,407 7.55%
------- -------
Noninterest earning
assets 147,891 108,592
---------- ----------
Total average assets $1,440,103 $1,128,335
========== ==========
INTEREST BEARING
LIABILITIES
NOW and money market $ 250,718 $ 997 1.58% $ 188,890 $ 1,059 2.22%
Savings 37,617 47 0.50% 35,998 91 1.00%
Time certificates 651,635 6,501 3.96% 560,606 6,855 4.85%
---------- ------- ---------- -------
Total interest bearing
deposits 939,970 7,545 3.18% 785,494 8,005 4.04%
Repurchase agreements
sold 52,862 294 2.21% 34,183 296 3.44%
Borrowed funds 125,218 974 3.09% 17,545 203 4.59%
---------- ------- ---------- -------
Total interest bearing
liabilities 1,118,050 8,813 3.13% 837,222 8,504 4.03%
---------- ------- ---------- -------
Noninterest bearing
deposits 159,238 154,496
Stockholders' equity 152,513 128,351
Other liabilities 10,302 8,266
---------- ----------
Total average liabilities
and
stockholders' equity $1,440,103 $1,128,335
========== ==========
NET INTEREST INCOME/
YIELD (3,4) $10,830 3.33% $10,903 4.24%
======= =======
INTEREST SPREAD (5) 2.90% 3.52%
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 34%, 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.
Yadkin Valley Financial Corporation Average Balance
Sheets and Net Interest Income Analysis
(Dollars in Thousands)
(Unaudited)
Nine Months Ended: September 30, 2008 September 30, 2007
------------------------- -------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
---------- ------- ----- ---------- ------- -----
INTEREST EARNING ASSETS
Federal funds sold $ 4,294 $ 45 1.40% $ 6,626 $ 268 5.41%
Interest bearing
deposits 11,095 300 3.60% 3,162 110 4.65%
Investment securities
(1) 142,817 5,603 5.23% 135,703 5,174 5.10%
Total loans (1,2) 1,057,970 51,104 6.43% 855,011 50,808 7.94%
---------- ------- ---------- -------
Total average earning
assets (1) 1,216,176 57,052 6.25% 1,000,502 56,360 7.53%
------- -------
Noninterest earning
assets 129,706 110,521
---------- ----------
Total average assets $1,345,882 $1,111,258
========== ==========
INTEREST BEARING
LIABILITIES
NOW and money market $ 232,443 $ 3,010 1.73% $ 187,946 $ 3,118 2.22%
Savings 36,942 155 0.56% 36,445 273 1.00%
Time certificates 619,681 19,572 4.21% 545,262 19,590 4.80%
---------- ------- ---------- -------
Total interest bearing
deposits 889,066 22,737 3.41% 769,653 22,981 3.99%
Repurchase agreements
sold 50,005 922 2.46% 34,681 866 3.34%
Borrowed funds 94,158 2,428 3.44% 18,912 654 4.62%
---------- ------- ---------- -------
Total interest bearing
liabilities 1,033,229 26,087 3.36% 823,246 24,501 3.98%
---------- ------- ---------- -------
Noninterest bearing
deposits 155,585 152,976
Stockholders' equity 146,134 128,579
Other liabilities 10,934 6,457
---------- ----------
Total average
liabilities and
stockholders' equity $1,345,882 $1,111,258
========== ==========
NET INTEREST INCOME/
YIELD (3,4) $30,965 3.39% $31,859 4.26%
======= =======
INTEREST SPREAD (5) 2.89% 3.52%
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 34%, 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.Contact: For additional information contact:
William A. Long
President and CEO
Edwin E. Laws
CFO
(336) 526-6312
Megan R. Malanga
Nvestcom Investor Relations
(954) 781-4393
Email Contact
Source: Yadkin Valley Financial Corporation
|  | |||||||||||||
