Yadkin Valley Financial Corporation Continues Strong Operating Results With Third Consecutive Quarter of Profitability
(firmenpresse) - ELKIN, NC -- (Marketwire) -- 04/26/12 -- Yadkin Valley Financial Corporation (NASDAQ: YAVY)
Net income available to common shareholders for the first quarter of 2012 was $2.7 million, or $0.14 per diluted share.
Net interest margin increased by 23 basis points to 3.54% due to continued improvement in our deposit mix, lowering our overall cost of deposits to 1.04%.
Adversely classified loans decreased $20 million, nonperforming loans decreased $4.3 million, and loans 30-89 days past due decreased $15.6 million compared to the previous quarter, which in turn led to improved credit quality and a decrease in our provision for loan losses.
We have fully realized the results of our expense management plan and believe that we are now operating at a more normalized run rate on employee and occupancy expenses, even though non-interest expense increased slightly in linked quarters.
Non-interest income, excluding securities gains, increased quarter over quarter, largely due to increases on gains from mortgage loan sales.
Leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 8.6%, 10.9%, and 12.1%, respectively, for the holding company as of March 31, 2012.
Yadkin Valley Financial Corporation (NASDAQ: YAVY), the holding company for Yadkin Valley Bank and Trust Company, announced financial results for the first quarter ended March 31, 2012. Net income available to common shareholders for the quarter was $2.7 million, or $0.14 per diluted share, compared to net income of $2.2 million, or $0.11 per diluted share, in the fourth quarter of 2011, and a net loss of $1.6 million, or $0.10 per diluted share in the first quarter of 2011.
Joe Towell, President and CEO of Yadkin Valley Financial, commented, "Our strategic plan continues to yield results with our third consecutive quarter of meaningful profitability. The Bank's performance continues to stabilize as we improve key metrics such as net interest margin, cost of deposits, and the adversely classified assets ratio.
"Improving asset quality is one of our primary goals for 2012. We are pleased to see a $20 million decrease in our adversely classified loans, as we continue to work through problem loans. This decrease in classified loans, along with lower historical loan charge-offs, led to a lower provision for loan losses this quarter. Our loan loss reserve model has been deemed adequate by management and all third party reviews, and we believe it is on track to cover the potential losses remaining in our loan portfolio.
"We are excited about our strong net interest margin this quarter. While we did have some adjustments to our interest income throughout the second half of 2011, we believe 3.54% is a normalized margin, and we expect that to increase going forward as we continue to focus on improving our deposit mix with core deposit acquisition.
"We recently announced the filing of a Form S-1 resale registration statement. We feel this was a prudent act given the recent activity we have seen from the United States Treasury Department and the auctioning of other Banks' preferred stock held under the Troubled Asset Relief Program (TARP). We want to be ready, should an opportunity be made available to us. However, filing this form is not an assurance that the Company's TARP shares will be included in an auction or sold to one or more investors."
Nonperforming loans continued to decrease, down $4.3 million, to $66.1 million, or 4.69%, of total gross loans at March 31, 2012, compared to $70.4 million, or 4.78%, of total gross loans at December 31, 2011. The strategy regarding nonperforming loans continues to yield results as the inflow to the nonperforming category has slowed considerably. "We continue to keep tight focus on nonperforming loans," said Towell. "We believe that as the inflow to the nonperforming category slows, our credit quality trends are beginning to show improvement."
Other Real Estate Owned ("OREO") totaled $28.8 million at March 31, 2012, an increase of $3.8 million compared to $25.0 million at December 31, 2011. This increase in OREO was the result of $7.1 million in foreclosures for the quarter, offset by dispositions of $2.4 million. We also recognized $774,000 in additional write downs on OREO, as management determined changes in asset values due to market trends. Total nonperforming assets at March 31, 2012 were $94.8 million, or 4.80% of total assets, a decrease of $482,000 from December 31, 2011.
During the first quarter of 2012, the provision for loan losses was $2.4 million, a decrease of $1.2 million from the fourth quarter of 2011. The decrease in provision was driven by a $20 million, or 15%, decrease in adversely classified loans and a 4.5% decrease in total loans compared to the previous quarter. Net charge-offs for the first quarter totaled $5.1 million, or 1.44% of average loans on an annualized basis, an increase of $600,000 from the fourth quarter. Of the $5.1 million in net charge-offs, $1.0 million was related to the valuation and write down of a loan held for potential sale.
At March 31, 2012 the allowance for loan losses was $30.1 million, compared to $32.8 million at December 31, 2011. As a percentage of total loans held-for-investment, the allowance for loan losses was 2.17% in the first quarter of 2012, down from 2.26% in the fourth quarter of 2011. Out of the $30.1 million in total allowance for loan losses at March 31, 2012, the specific allowance for impaired loans accounted for $3.4 million, down from $4.1 million in the fourth quarter. The specific allowance for impaired loans decreased because our impaired loan balances decreased. The remaining general allowance of $26.6 million attributed to unimpaired loans was down from $28.7 million at the end of the fourth quarter. This decrease was driven primarily by continued decreases in loans held-for-investment and improving trends in loans 30-89 days past due.
Net interest income increased $279,000, or 1.7%, quarter over quarter, totaling $15.9 million for the first quarter of 2012. The net interest margin improved to 3.54%, up from 3.31% in the fourth quarter. While we are very pleased with our quarter-end net interest margin, the 23 basis point increase is really a stabilization of the margin following several adjustments to interest income that the Company addressed in the third and fourth quarters of 2011. Additionally, the managed shift in our deposit mix improved our net interest margin as cost of total deposits decreased to 1.04% for the quarter as compared to 1.09% in the fourth quarter of 2011.
Non-interest income decreased $539,000, or 11.5%, to $4.1 million compared to $4.7 million in the fourth quarter of 2011. Excluding securities gains, our non-interest income actually increased by $125,000, largely due to our increase in mortgage income for the quarter.
Non-interest expense increased $260,000, or 1.8%, to $14.2 million, up from $13.9 million in the fourth quarter of 2011. The majority of this increase was driven by increased cost of operation of other real estate owned and the timing of several annual expenses in the salary and benefits line item.
Total assets decreased $16.6 million for the first quarter of 2012 as part of our continued balance sheet management strategy. Gross loans held-for-investment decreased $63.1 million compared to the fourth quarter of 2011, and total deposits decreased $20.5 million. This deposit decrease continues to be mostly higher-cost time deposits, as our non-interest bearing demand deposits continue to increase in volume.
The Bank remains well-capitalized for regulatory purposes. As of March 31, 2012, the Bank's leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 8.3%, 10.6%, and 11.9%, respectively. Leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 8.6%, 10.9%, and 12.1% respectively, for the holding company as of March 31, 2012. 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 continue to improve due to positive operating results.
Yadkin Valley Financial Corporation will host a conference call at 10:00 a.m. EDT on Thursday, April 26, 2012 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 and accompanying visual aids may be accessed at . A replay of the call will be available until May 3, 2012 by dialing 855-859-2056 or 404-537-3406 and entering access code 73819351.
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 subsidiary, Sidus Financial, LLC, 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 . 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) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan losses, 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; (2) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (3) 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; (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 deposit rates, the net interest margin, and funding sources; (6) changes in the U.S. legal and regulatory framework, including the effect of recent financial reform legislation on the banking industry; and (7) 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 (). 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 statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
For additional information contact:
Joseph H. Towell
President and Chief Executive Officer
(704) 768-1133
Jan H. Hollar
Executive Vice President and Chief Financial Officer
(704) 768-1161
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Datum: 26.04.2012 - 10:45 Uhr
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News-ID 139485
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