Yadkin Valley Financial Corporation Positions for the Future by Successfully Executing Problem Asset Disposition Plan; Announces Results for Fourth Quarter 2012

Marketwired

ELKIN, NC--(Marketwire - Jan 24, 2013) - Yadkin Valley Financial Corporation (NASDAQ: YAVY)

Fourth Quarter Highlights:

  • The Company successfully executed its announced accelerated asset disposition plan, using the proceeds of the capital raise announced last quarter.
  • As a result of the asset disposition plan, nonperforming loans decreased $34.2 million to $22.8 million, or 1.71% of total loans, down from 4.12% at September 30, 2012 and nonperforming assets decreased $47.8 million to $31.6 million, or 1.64% of total assets, down from 4.13% at September 30, 2012.
  • The ratio of loan loss reserve to nonperforming loans, a key credit quality indicator, increased to 110.22% in the fourth quarter of 2012, as compared to 47.73% in the prior quarter.
  • Adversely classified loans decreased $47.2 million to $49.8 million at December 31, 2012 as compared to $97.1 million at September 30, 2012. The ratio of adversely classified assets to Tier 1 capital and the loan loss reserve was 29.79% at the end of the fourth quarter, down from 60.07% at the end of the third quarter of 2012.
  • Net loss to common shareholders for the fourth quarter of 2012 was $25.3 million, or $1.21 per diluted share. The increased loss is due primarily to credit loss from the announced asset disposition plan carried out in the fourth quarter.
  • Cost of deposits continued to decrease, down to 0.84% from 0.91% in the third quarter of 2012. Core deposits now represent 55.1% of total deposits, up from 52.2% last quarter as our mix shows further improvement.
  • As of December 31, 2012, the Company's leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 9.2%, 12.1%, and 13.3%, respectively. In addition, our tangible common equity to total tangible assets ratio was 7.30% at the end of the fourth quarter, compared to 5.44% at the end of the third quarter of 2012.

2012 Highlights:

  • Net loss to common shareholders for the full year 2012 was $12.6 million, or $0.64 per diluted share.
  • Year over year, the Bank has shown dramatic improvements in credit quality due to management's prudent decisions regarding problem asset disposition.
  • Capital ratios have improved significantly year over year due to capital preservation efforts by the Company in addition to $45 million in new capital raised during the fourth quarter of 2012.
  • Core deposits increased $42.9 million, or 5.01%, in 2012, and core deposits now represent 55.1% of total deposits, as compared to 49.4% at December 31, 2011.

Yadkin Valley Financial Corporation (NASDAQ: YAVY), the holding company for Yadkin Valley Bank and Trust Company, announced today financial results for the fourth quarter and full year ended December 31, 2012. Net loss to common shareholders for the quarter was $25.3 million, or $1.21 per diluted share, compared to net loss of $81,000, or $0.00 per diluted share, in the third quarter of 2012, and net income of $2.2 million, or $0.11 per diluted share, in the fourth quarter of 2011. Net loss to common shareholders for the year was $12.6 million, or $0.64 per diluted share, compared to net loss of $17.4 million or $0.95 per diluted share in 2011.

Joe Towell, President and CEO of Yadkin Valley Financial, commented, "As we outlined our accelerated asset disposition plan last quarter, we have executed our plan using the proceeds from our capital raise. We have successfully sold $49 million in problem loans and other real estate owned as of December 31, 2012, and we have taken additional write downs of $14 million. We achieved our internal goals relative to the reductions we took on these assets and the prices at which they were sold. This asset disposition yields dramatically improved credit metrics, with our nonperforming assets to total assets ratio dropping to 1.64%, down from 4.13% in the third quarter.

"For the fourth quarter, we are very pleased to report that we have lowered our cost of deposits to 0.84%, down from 0.91% in the prior quarter. However, the rate environment continues to negatively impact our margin. Despite that, our net interest income is in a position to improve over the next several quarters due to the disposition of many non-earning assets during the fourth quarter and our redeployment of funds into earning assets.

"2012 was a breakthrough year in the life of our Company as we worked through TARP, a capital raise, and improving the quality of our balance sheet. While we took larger charge-offs in the fourth quarter, we are pleased with the success we've had with our accelerated asset disposition. As we look toward 2013, we believe our future has great potential for increased profitability as we serve our customers throughout the Carolinas."

Fourth Quarter 2012 Financial Highlights

Asset Quality

The Bank's key asset quality metrics are vastly improved compared to the prior quarter due to the successful execution of the asset disposition plan announced last quarter. First, nonperforming loans decreased for the fifth consecutive quarter, down $34.2 million to $22.8 million in the fourth quarter of 2012 from $57.1 million at September 30, 2012. In addition, our adversely classified loans, which include substandard, substandard-impaired, and doubtful loans, decreased $47.2 million compared to the third quarter of 2012.

                     
    Nonperforming Loan Analysis  
    (Dollars in thousands)  
                     
    December 31, 2012     September 30, 2012  


Loan Type
 
Outstanding
Balance
  % of
Total
Loans
   
Outstanding
Balance
  % of
Total
Loans
 
Construction/land development   $ 4,636   0.35 %   $ 12,785   0.92 %
Residential construction     2,749   0.21 %     3,712   0.27 %
HELOC     1,041   0.08 %     3,950   0.29 %
1-4 Family residential     3,123   0.23 %     6,370   0.46 %
Commercial real estate     8,023   0.60 %     21,420   1.54 %
Commercial & industrial     2,790   0.21 %     8,293   0.60 %
Consumer & other     455   0.03 %     523   0.04 %
Total   $ 22,817   1.71 %   $ 57,053   4.12 %
                         

Other real estate owned (OREO) totaled $8.7 million at December 31, 2012, a decrease of $13.6 million compared to $22.3 million at September 30, 2012. As part of our asset disposition plan, approximately 59 OREO properties were marked to our best estimate of an exit price at December 31, 2012 in anticipation of including these properties in a public auction during the first quarter of 2013. The decrease in total OREO in the fourth quarter is due to $6.1 million in sales for the quarter and taking the write downs, and we do not expect further significant loss following the completion of the auction. Total nonperforming assets at December 31, 2012 were $31.6 million, or 1.64% of total assets, a decrease of $47.8 million from September 30, 2012, due to the accelerated decrease in nonperforming loans and OREO balances.

During the fourth quarter of 2012, the provision for loan losses was $31.6 million, an increase of $27.3 million from the third quarter of 2012. The increase in provision was driven by the increase in credit losses for the quarter due to the execution of the accelerated nonperforming loan disposition plan. Total net charge-offs for the fourth quarter of 2012 were $33.6 million, or 9.74% of average loans on an annualized basis.

At December 31, 2012, the allowance for loan losses was $25.1 million, compared to $27.2 million at September 30, 2012. As a percentage of total loans held-for-investment, the allowance for loan losses was 1.92% in the fourth quarter of 2012, down from 2.00% in the third quarter of 2012. The reserve remains at a conservative level due to continued economic uncertainty and other external factors in our markets. Out of the $25.1 million in total allowance for loan losses at December 31, 2012, the specific allowance for impaired loans accounted for $1.4 million, down from $3.7 million in the third quarter. The remaining general allowance of $23.7 million attributed to unimpaired loans was up slightly from $23.5 million at the end of the third quarter.

Net Interest Income and Net Interest Margin

Net interest income was down quarter over quarter, totaling $14.7 million for the fourth quarter of 2012. Due to the low rate environment and the Company's increased cash position at year end as a result of the asset sale, the net interest margin experienced compression, ending the quarter at 3.28%. We expect improvement in both net interest income and the net interest margin in coming quarters due to the elimination of nonperforming assets during the fourth quarter of 2012, the deployment of excess liquidity on the balance sheet, the repricing of our time deposits, and our continued shift in deposit mix.

In the fourth quarter of 2012, we continued to strategically shift our deposit mix and lower our cost of deposits. Core deposits now represent 55.1% of total deposits, our highest percentage in the last eight quarters, as we focus on core deposit growth. As a result of this strategy, our cost of deposits decreased to 0.84% for the quarter as compared to 0.91% in the third quarter of 2012.

Non-Interest Income

Non-interest income decreased $3.7 million to $986,000 compared to $4.7 million in the third quarter of 2012. This significant decrease is due primarily to the $2.1 million loss on sale of loans recorded as a result of the asset disposition plan and the $1.0 million loss on sale of subsidiary related to the Company's sale of its mortgage reinsurance line of business. However, income from fees increased 15.1% and income from service charges increased 5.98%, both compared to the prior quarter.

Non-Interest Expense

Non-interest expense increased in the fourth quarter to $22.7 million as compared to $14.8 million in the third quarter of 2012. This increase was due to increased cost of OREO because of the write downs taken on OREO properties to our best estimation of an exit price in anticipation of an auction of these properties in the first quarter of 2013.

Balance Sheet and Capital

Total assets increased $3.1 million during the fourth quarter of 2012 as the Company's balance sheet began to stabilize. Gross loans held-for-investment decreased $49.4 million compared to the third quarter of 2012, due to the loans sold through our accelerated asset disposition plan. Excluding these loan sales, our gross loans decreased slightly quarter over quarter, as we continue to implement a more aggressive business acquisition strategy. Total deposits decreased $19.8 million, which primarily consists of higher-cost time deposits, as our core deposits increased $35.7 million compared to the prior quarter.

The Company's capital ratios have strengthened and continue to exceed all regulatory requirements. As of December 31, 2012, the Bank's leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 8.9%, 11.7%, and 13.0%, respectively. Leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 9.2%, 12.1%, and 13.3% respectively, for the holding company as of December 31, 2012. In addition, the Company's tangible common equity to total tangible assets ratio was 7.30% at the end of the fourth quarter. For capital adequacy purposes, leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio must be in excess of 5.00%, 6.00%, and 10.00%, respectively, to be considered well-capitalized. Regulatory capital ratios for the Company improved this quarter primarily due to increased capital levels from the Company's capital raise during the fourth quarter of 2012.

Conference Call

Yadkin Valley Financial Corporation will host a conference call at 10:00 a.m. EST on Thursday, January 24, 2013 to discuss financial results, business highlights, and outlook. The call may be accessed by dialing 877-359-3650 at least 10 minutes prior to the call. A webcast of the call audio may be accessed at http://investor.shareholder.com/media/eventdetail.cfm?eventid=124449&CompanyID=YAVY&e=1&mediaKey=C0BD0B7D7BA30A3E46A5C745FA0F7F34. A replay of the call will be available until January 31, 2013 by dialing 855-859-2056 or 404-537-3406 and entering Conference ID 91530348.

About Yadkin Valley Financial Corporation

Yadkin Valley Financial Corporation is the holding company for Yadkin Valley Bank and Trust Company, a full-service community bank providing services in 34 branches throughout its two regions in North Carolina and South Carolina. The Western Region serves Avery, Watauga, Ashe, Surry, Wilkes, Yadkin, and Iredell Counties. The Southern Region serves Durham, Orange, Granville, Mecklenburg, and Union Counties in North Carolina, and Cherokee and York Counties in South Carolina. The Bank provides mortgage lending services through its mortgage division, Yadkin Valley Mortgage, headquartered in Greensboro, NC. Securities brokerage services are provided by Main Street Investment Services, Inc., a Bank subsidiary with four offices located in the branch network. Yadkin Valley Financial Corporation's website is www.yadkinvalleybank.com. Yadkin Valley shares are traded on NASDAQ under the symbol YAVY.

SAFE HARBOR

This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. Forward looking statements generally include words such as "expects," "projects," "anticipates," "believes," "intends," "estimates," "strategy," "plan," "potential," "possible" and other similar expressions. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those anticipated in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled "Forward-Looking Statements" on pages 45-47 of Yadkin Valley Financial Corporation's quarterly report filed on Form 10-Q with the SEC for the quarter ended September 30, 2012 and in the sections entitled "Risk Factors" in quarterly reports filed on Form 10-Q for the quarters ended September 30, 2012, June 30, 2012 and March 31, 2012, annual report filed on Form 10-K for the year ended December 31, 2011, and, once available, the annual report filed on Form 10-K for the year ended December 31, 2012. Additional factors that may cause our forward-looking statements to differ materially from actual results include, without limitation: (1) the shareholder approvals required for the Private Placement may not be obtained or may not be obtained on the schedule that we anticipate; (2) other closing conditions for the Private Placement may not be satisfied; (3) we may not successfully negotiate and enter into definitive agreements with respect to, and close the, asset sales or accelerated foreclosed properties dispositions under the Asset Disposition Plan; and (4) the asset sales or accelerated foreclosed properties dispositions may not occur within our currently expected ranges for price and other terms, and the pre-tax charges associated with such sales may exceed the pre-tax charges that we currently anticipate. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.

   
Yadkin Valley Financial Corporation  
Consolidated Balance Sheets (Unaudited)  
   
  (Amounts in thousands except share and per share data)  
  December 31,   September 30,   June 30   March 31,   December 31,  
  2012   2012   2012   2012   2011 (a)  
Assets:                              
Cash and due from banks $ 36,125   $ 26,048   $ 25,642   $ 36,478   $ 40,790  
Federal funds sold   50     50     50     50     50  
Interest-earning deposits with banks   102,221     97,124     75,895     67,443     52,078  
                               
U.S. government agencies   27,527     32,869     23,058     23,433     23,726  
Mortgage-backed securities   230,894     221,806     248,674     263,230     232,494  
State and municipal securities   84,567     54,769     66,607     72,751     73,118  
Common and preferred stocks   132     1,112     1,133     1,111     1,084  
  Total investment securities   343,120     310,556     339,472     360,525     330,422  
                               
Construction loans   131,981     147,408     189,840     196,991     202,803  
Commercial, financial and other loans   193,810     190,294     189,245     187,037     200,750  
Residential mortgages   140,931     174,728     167,774     166,563     179,047  
Commercial real estate loans   617,468     615,733     594,798     605,539     631,639  
Installment loans   33,426     34,216     34,177     34,926     35,465  
Revolving 1-4 family loans   191,888     196,489     196,547     196,818     201,220  
  Total Loans   1,309,504     1,358,868     1,372,381     1,387,874     1,450,924  
Allowance for loan losses   (25,149 )   (27,231 )   (28,797 )   (30,062 )   (32,848 )
  Net loans   1,284,355     1,331,637     1,343,584     1,357,812     1,418,076  
Loans held for sale   27,679     24,766     24,867     20,548     19,534  
Accrued interest receivable   6,376     6,229     6,512     6,932     6,745  
Bank premises and equipment   41,849     41,460     41,547     41,861     42,120  
Foreclosed real estate   8,738     22,294     25,573     28,751     24,966  
Non-marketable equity securities at cost   4,154     4,155     4,630     6,130     6,130  
Investment in bank-owned life insurance   26,433     26,274     26,114     26,091     25,934  
Core deposit intangible   2,653     2,914     3,180     3,455     3,733  
Other assets   39,685     26,871     28,273     20,530     22,610  
                               
  Total assets $ 1,923,438   $ 1,920,378   $ 1,945,339   $ 1,976,606   $ 1,993,188  
                               
Liabilities and shareholders' equity:                              
Deposits:                              
Non-interest bearing $ 273,896   $ 256,402   $ 244,191   $ 235,417   $ 229,895  
NOW, savings and money market accounts   624,460     606,220     613,051     626,538     625,560  
Time certificates:                              
$100 or more   316,146     342,356     348,072     356,793     360,388  
Other   417,160     446,482     468,049     492,072     515,498  
  Total deposits   1,631,662     1,651,460     1,673,363     1,710,820     1,731,341  
                               
Borrowings   105,136     102,299     99,310     105,723     105,539  
Accrued expenses and other liabilities   15,846     11,383     18,087     16,571     15,722  
  Total liabilities   1,752,643     1,765,142     1,790,760     1,833,114     1,852,602  
                               
Total shareholders' equity   170,794     155,236     154,579     143,492     140,586  
                               
Total liabilities and shareholders' equity $ 1,923,438   $ 1,920,378   $ 1,945,339   $ 1,976,606   $ 1,993,188  
                               
Period End Shares Outstanding   43,151,646     20,003,688     20,003,688     19,506,188     19,526,188  
                               
                               
(a) Derived from audited consolidated financial statements  
                               
   
Yadkin Valley Financial Corporation  
Consolidated Income Statements (Unaudited)  
   
    Three Months Ended  
    (Amounts in thousands except share and per share data)  
    December 31     September 30,     June 30,   March 31,   December 31  
    2012     2012     2012   2012   2011 (a)  
                                     
Interest and fees on loans (b)   $ 17,338     $ 17,735     $ 17,944   $ 18,939   $ 19,173  
Interest on securities     1,381       1,674       1,754     2,006     1,709  
Interest on federal funds sold     8       9       8     7     6  
Interest-bearing deposits     66       28       38     37     71  
  Total interest income     18,793       19,446       19,744     20,989     20,959  
                                     
Time deposits of $100 or more     1,346       1,762       1,913     1,992     2,271  
Other deposits     2,132       2,018       2,193     2,370     2,569  
Borrowed funds (b)     570       477       480     735     516  
  Total interest expense     4,048       4,257       4,586     5,097     5,356  
                                     
    Net interest income     14,745       15,189       15,158     15,892     15,603  
Provision for loan losses     31,554       4,251       2,218     2,351     3,627  
Net interest income after provision for loan losses    
(16,809
)    
10,938
     
12,940
   
13,541
   
11,976
 
                                     
Non-interest income                                    
  Service charges on deposit accounts (b)     1,398       1,319       1,325     1,243     1,381  
  Other service fees (b)     986       857       893     895     782  
  Income on investment in bank owned life insurance     159       159       157     157     166  
  Mortgage banking activities (b)     1,448       1,599       1,674     1,139     1,267  
  Gains on sale of securities     96       1,348       300     -     678  
  Other than temporary impairment of investments     (50 )     -       -     -     -  
  Loss on sale of subsidiary     (1,019 )     -       -     -     -  
  Loss on sale of loans     (2,132 )     (900 )     -     -     -  
  Other     100       283       57     75     140  
    Total non-interest income     986       4,665       4,406     3,509     4,414  
                                     
Non-interest expense                                    
  Salaries and employee benefits (b)     6,935       6,914       6,354     6,110     6,135  
  Occupancy and equipment     1,562       1,794       1,790     1,851     1,781  
  Printing and supplies     157       168       151     145     154  
  Data processing     447       456       453     387     377  
  Communication expense     354       314       354     351     367  
  Advertising and marketing     77       103       100     76     101  
  Amortization of core deposit intangible     260       266       275     279     282  
  FDIC assessment expense     664       650       659     695     718  
  Attorney fees     263       311       150     216     108  
  Loan collection expense (b)     569       211       219     249     287  
  (Gain) loss on fixed assets     153       -       (1 )   (21 )   13  
  Net cost of operation of other real estate owned     8,136       1,322       2,745     1,228     1,086  
  Other (b)     3,130       2,283       2,483     2,013     2,267  
    Total non-interest expense     22,708       14,792       15,732     13,579     13,676  
                                     
Income (loss) before income taxes     (38,531 )     811       1,614     3,471     2,714  
Provision for income taxes (benefit)     (14,632 )     54       (9,383 )   -     (211 )
                                     
Net income (loss)     (23,899 )     757       10,997     3,471     2,925  
    Preferred stock dividend and amortization of preferred stock discount    
1,419
     
838
     
833
   
821
   
771
 
Net income (loss) available to common shareholders   $ (25,318 )   $ (81 )   $ 10,164   $ 2,650   $ 2,154  
                                     
    Basic   $ (1.21 )   $ (0.00 )   $ 0.52   $ 0.14   $ 0.11  
    Diluted   $ (1.21 )   $ (0.00 )   $ 0.52   $ 0.14   $ 0.11  
                                     
Weighted average number of shares outstanding                                    
    Basic     20,917,579       19,389,251       19,386,519     19,378,198     19,371,469  
    Diluted     20,917,579       19,390,253       19,386,519     19,378,198     19,371,469  
                                     
(a) Derived from audited consolidated financial statements  
(b) Certain income and expense amounts have been reclassified based on a change in our mortgage reporting segment to conform to 2012 presentation.  
   
                               
Yadkin Valley Financial Corporation  
(unaudited)  
   
    At or For the Three Months Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,  
    2012     2012     2012     2012     2011  
                                         
Per Share Data:                                        
Basic Earnings per Share   $ (1.21 )   $ 0.00     $ 0.52     $ 0.14     $ 0.11  
Diluted Earnings per Share     (1.21 )     0.00       0.52       0.14       0.11  
Book Value per Share     3.31       5.36       5.34       4.92       4.77  
                                         
Selected Performance Ratios:                                        
Return on Average Assets (annualized)     -5.15 %     -0.02 %     2.08 %     0.54 %     0.42 %
Return on Average Equity (annualized)     -53.53 %     -0.21 %     26.93 %     6.48 %     6.17 %
Net Interest Margin (annualized)(7)     3.28 %     3.37 %     3.39 %     3.54 %     3.16 %
Net Interest Spread (annualized)(7)     3.08 %     3.19 %     3.21 %     3.35 %     2.98 %
Non-interest Income as a % of Revenue(6)(7)     -13.54 %     29.90 %     25.55 %     20.73 %     32.14 %
Non-interest Income as a % of Average Assets (7)     0.10 %     0.24 %     0.23 %     0.18 %     0.26 %
Non-interest Expense as a % of Average Assets (7)     1.22 %     0.76 %     0.81 %     0.69 %     0.68 %
                                         
Asset Quality:                                        
Loans 30-89 days past due (000's) (4)   $ 14,000     $ 13,354     $ 10,321     $ 10,245     $ 25,888  
Loans over 90 days past due still accruing (000's)     -       -       -       -       -  
Nonperforming Loans (000's)     22,817       57,053       63,305       66,088       70,355  
Other Real Estate Owned (000's)     8,738       22,294       25,573       28,751       24,966  
Nonperforming Assets (000's)(5)     31,555       79,347       88,878       94,839       95,321  
Accruing/Performing troubled debt restructurings (000's)     17,667       13,929       12,596       15,259       17,173  
Nonperforming Loans to Total Loans     1.71 %     4.12 %     4.53 %     4.69 %     4.78 %
Nonperforming Assets to Total Assets     1.64 %     4.13 %     4.57 %     4.80 %     4.78 %
Allowance for Loan Losses to Total Loans     1.88 %     1.97 %     2.06 %     2.13 %     2.23 %
Allowance for Loan Losses to Total Loans Held for Investment     1.92 %     2.00 %     2.10 %     2.17 %     2.26 %
Allowance for Loan Losses to Nonperforming Loans     110.22 %     47.73 %     45.49 %     45.49 %     47.31 %
Net Charge-offs/Recoveries to Average Loans (annualized)     9.74 %     1.66 %     0.99 %     1.44 %     1.20 %
                                         
Capital Ratios:                                        
Equity to Total Assets     8.88 %     8.08 %     7.95 %     7.26 %     7.05 %
Tier 1 leverage ratio(1)     8.92 %     8.73 %     8.55 %     8.30 %     7.99 %
Tier 1 risk-based ratio(1)     11.73 %     11.18 %     10.89 %     10.61 %     10.23 %
Total risk-based capital ratio(1)     12.99 %     12.44 %     12.15 %     11.87 %     11.49 %
                                         
Non-GAAP disclosures(2):                                        
Tangible Book Value per Share   $ 3.25     $ 5.21     $ 5.18     $ 4.74     $ 4.58  
Return on Tangible Equity (annualized) (3)     -54.34 %     -0.21 %     27.54 %     6.63 %     6.34 %
Tangible Common Equity to Tangible Assets (3)     7.30 %     5.44 %     5.33 %     4.69 %     4.50 %
Efficiency Ratio (7)     138.07 %     72.21 %     77.92 %     67.59 %     66.26 %
                                         
Notes:                                        
(1) Tier 1 leverage, Tier 1 risk-based, and Total risk-based ratios are ratios for the bank, Yadkin Valley Bank and Trust Company as reported on Consolidated Reports of Condition and Income for a Bank With Domestic Offices Only - FFIEC 041.  
(2) Management uses these non-GAAP financial measures because it believes they are useful for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. Management believes these non-GAAP financial measures provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as comparison to financial results for prior periods. These non-GAAP financial measures should not be considered as a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled financial measures used by other companies.  
(3) Tangible Common Equity is the difference of shareholders' equity less preferred shares and core deposit intangibles. Tangible Assets are the difference of total assets less core deposit intangibles.  
(4) Past due numbers exclude loans classified as nonperforming.  
(5) Nonperforming assets exclude accruing troubled debt restructured loans.  
(6) Ratio is calculated by taking non-interest income as a percentage of net interest income after provision for loan losses plus total non-interest income.  
(7) Certain income and expense amounts in the current and prior periods have been reclassified based on a change in our mortgage reporting segment.  
   
         
Yadkin Valley Financial Corporation        
Average Balance Sheets and Net Interest Income Analysis (Unaudited)        
                                         
    Three Months Ended December 31,        
    2012           2011        
    (Dollars in Thousands)        
                                         
    Average       Yield/           Average       Yield/        
    Balance   Interest   Rate           Balance   Interest   Rate        
INTEREST EARNING ASSETS                                                
Total loans (1,2)   $ 1,369,884   $ 17,367   5.04 %   (8 )   $ 1,480,509   $ 19,224   5.15 %   (8 )
Investment securities     325,578     1,599   1.95 %           313,760     1,959   2.48 %      
Interest-bearing deposits & federal funds sold    
124,947
   
74
 
0.23
%          
111,936
   
78
 
0.28
%      
Total average earning assets (1)     1,820,409     19,040   4.16 %   (6 )     1,906,205     21,261   4.43 %   (6 )
Noninterest earning assets     128,390                       123,655                  
Total average assets   $ 1,948,799                     $ 2,029,860                  
                                                 
INTEREST BEARING LIABILITIES                                                
Time deposits   $ 766,695     3,203   1.66 %         $ 917,019     4,286   1.85 %      
Other deposits     615,040     274   0.18 %           618,461     554   0.36 %      
Borrowed funds     104,320     570   2.17 %           110,758     504   1.81 %      
Total interest bearing liabilities     1,486,055     4,047   1.08 %   (7 )     1,646,238     5,344   1.29 %   (7 )
                                                 
Noninterest bearing deposits     263,871                       228,398                  
Other liabilities     11,209                       16,653                  
Total average liabilities     1,761,135                       1,891,289                  
                                                 
Shareholders' equity     187,664                       138,571                  
                                                 
Total average liabilities and shareholders' equity   $ 1,948,799                     $ 2,029,860                  
                                                 
NET INTEREST INCOME/YIELD (3,4)         $ 14,993  
3.28
%  
(8
)         $ 15,917  
3.31
%  
(8
)
                                                 
INTEREST SPREAD (5)               3.08 %   (8 )               3.14 %   (8 )
                                                 
(1) Yields related to securities and loans exempt from Federal income taxes are stated on a fully tax-equivalent basis, assuming a Federal income tax rate of 35%, reduced by the nondeductible portion of interest expense.  
(2) The loan average includes loans on which accrual of interest has been discontinued.  
(3) Net interest income is the difference between income from earning assets and interest expense.  
(4) Net interest yield is net interest income divided by total average earning assets.  
(5) Interest spread is the difference between the average interest rate received on earning assets and the average rate paid on interest bearing liabilities.  
(6) Interest income for 2012 and 2011 includes $95,000 and $78,000, respectively, of accretion for purchase accounting adjustments related to loans acquired in the merger with American Community.  
(7) Interest expense for 2012 and 2011 includes $43,000 and $101,000, respectively, of accretion for purchase accounting adjustments related to deposits and borrowings acquired in the merger with American Community.  
(8) Certain income and expense amounts have been reclassified based on a change in our mortgage reporting segment.  
   
         
Yadkin Valley Financial Corporation        
Average Balance Sheets and Net Interest Income Analysis (Unaudited)        
                                         
    Year Ended December 31,        
    2012           2011        
    (Dollars in Thousands)        
                                         
    Average       Yield/           Average       Yield/        
    Balance   Interest   Rate           Balance   Interest   Rate        
INTEREST EARNING ASSETS                                                
Total loans (1,2)   $ 1,399,590     72,093   5.15 %   (8 )   $ 1,534,929   $ 80,800   5.26 %   (8 )
Investment securities     343,137     7,761   2.26 %           309,199     9,226   2.98 %      
Interest-bearing deposits & federal funds sold    
81,748
   
201
 
0.25
%          
141,249
   
376
 
0.27
%      
Total average earning assets (1)     1,824,475     80,055   4.39 %   (6 )     1,985,377   $ 90,402   4.55 %      
Noninterest earning assets     125,114                       142,193                  
Total average assets   $ 1,949,589                       2,127,570                  
                                                 
INTEREST BEARING LIABILITIES                                                
Time deposits     813,035     14,176   1.74 %         $ 1,025,165   $ 20,475   2.00 %      
Other deposits     617,724     1,550   0.25 %           610,620     3,400   0.56 %      
Borrowed funds     102,895     2,262   2.20 %           107,725     2,098   1.95 %      
Total interest bearing liabilities     1,533,654     17,988   1.17 %   (7 )   $ 1,743,510     25,973   1.49 %      
                                                 
Noninterest bearing deposits     244,137                       224,280                  
Other liabilities     14,666                       16,617                  
Total average liabilities     1,792,457                       1,984,407                  
                                                 
Shareholders' equity     157,132                       143,163                  
                                                 
Total average liabilities and shareholders' equity   $
1,949,589
                    $
2,127,570
                 
               
                                                 
NET INTEREST INCOME/YIELD (3,4)         $
62,067
 
3.40
%  
(8
)         $
64,429
 
3.25
%  
(8
)
                                                 
INTEREST SPREAD (5)               3.21 %   (8 )               3.06 %   (8 )
                                                 
(1) Yields related to securities and loans exempt from Federal income taxes are stated on a fully tax-equivalent basis, assuming a Federal income tax rate of 35%, reduced by the nondeductible portion of interest expense.  
(2) The loan average includes loans on which accrual of interest has been discontinued.  
(3) Net interest income is the difference between income from earning assets and interest expense.  
(4) Net interest yield is net interest income divided by total average earning assets.  
(5) Interest spread is the difference between the average interest rate received on earning assets and the average rate paid on interest bearing liabilities.  
(6) Interest income for 2012 and 2011 includes $253,000 and $577,000, respectively, of accretion for purchase accounting adjustments relatedto loans acquired in the merger with American Community.  
(7) Interest expense for 2012 and 2011 includes $54,000 and $423,000, respectively, of accretion for purchase accounting adjustments relatedto deposits and borrowings acquired in the merger with American Community.  
(8) Certain income and expense amounts have been reclassified based on a change in our mortgage reporting segment.  
   
Contact:
For additional information contact:

Joseph H. Towell
President and Chief Executive Officer
(704) 768-1133
Email Contact

Jan H. Hollar
Executive Vice President and Chief Financial Officer
(704) 768-1161
Email Contact

Rates

View Comments (0)