EX-99.1 2 yavyq12013pressrelease.htm EARNINGS PRESS RELEASE YAVY Q1 2013 Press Release



Yadkin Valley Financial Corporation Announces Solid Core Profitability and Rebranding Initiative; Back to Basics in Q1 2013

First Quarter Highlights:

Net income available to common shareholders for the first quarter of 2013 was $4.2 million, or $0.10 per diluted share.
The Company executed the remaining portion of its problem asset disposition plan by substantially completing the auction of Other Real Estate Owned (OREO) during the first quarter, which resulted in a $1.1 million net gain on sale.
The Bank's key credit quality metrics continue to improve, with the ratio of adversely classified items to Tier 1 capital and loan loss reserve at 26.85% at the end of the first quarter.
Net interest margin for the quarter was 3.57%, an increase of 29 basis points compared to the prior quarter.
The Company announced a rebranding initiative to be completed over the next 30 days. We will begin doing business as Yadkin Financial Corporation and Yadkin Bank on May 28, 2013.

Elkin, NC - April 25, 2013 - Yadkin Valley Financial Corporation (NASDAQ: YAVY), the holding company for Yadkin Valley Bank and Trust Company, announced today financial results for the first quarter ended March 31, 2013. Net income available to common shareholders for the quarter was $4.2 million, or $0.10 per diluted share, compared to a net loss of $25.3 million, or $1.21 per diluted share, in the fourth quarter of 2012, and net income of $2.7 million, or $0.14 per diluted share, in the first quarter of 2012.

Joe Towell, President and CEO of Yadkin Valley Financial Corporation, commented, “We are very pleased with our results in the first quarter, and we are also excited to be able to announce our rebranding initiative in conjunction with our financial results. With strong core net income, a significant decrease in non-interest expense, increased loan production, and continued strong results from our mortgage division, we believe that we are getting back to the basics of banking and providing superior financial solutions and service to our customers throughout the Carolinas.

Our rebranding initiative is a project we have been developing for some time. While there was benefit to retaining the names of our five community banks, our mortgage division, and our brokerage subsidiary over the years, we believe that now is the time to harness the synergy of our organization by bringing the values of our Company together under one strong brand. We will officially begin doing business as Yadkin Financial Corporation and Yadkin Bank on May 28, 2013. Our mortgage division will operate under the name Yadkin Mortgage, and our brokerage subsidiary will be Yadkin Wealth. At that time, we will also change our trading symbol to YDKN to align with the new brand. We will continue to trade on the NASDAQ exchange.

Additionally, we have announced our intention to effect a reverse stock split, pending shareholder approval at our Annual Meeting of Shareholders to be held on May 23, 2013. As we have evaluated our options, we believe that effecting this reverse stock split will be in the best interest of our shareholders as we continue to build value in our franchise in 2013 and beyond."














First Quarter 2013 Financial Highlights

Asset Quality

The Bank's key asset quality metrics continue to be strong following the completion of the accelerated asset disposition plan. First, our adversely classified items to Tier 1 capital and loan loss reserve ratio has continued to decrease, down to 26.85% at the end of the first quarter. In addition, while our nonperforming loans did increase slightly compared to the prior quarter due to two individual loans, they have decreased $42.4 million compared to the first quarter of 2012.

 
 
Nonperforming Loan Analysis
 
 
(Dollars in thousands)
 
 
March 31, 2013
 
December 31, 2012
Loan Type
 
Outstanding Balance
% of Total Loans
 
Outstanding Balance
% of Total Loans
Construction/land development
 
$
5,290

0.40
%
 
$
4,636

0.35
%
Residential construction
 
2,284

0.17
%
 
2,749

0.21
%
HELOC
 
2,005

0.15
%
 
1,041

0.08
%
1-4 family residential
 
3,027

0.23
%
 
3,123

0.23
%
Commercial real estate
 
8,040

0.61
%
 
8,023

0.60
%
Commercial & industrial
 
2,756

0.21
%
 
2,790

0.21
%
Consumer & other
 
310

0.02
%
 
455

0.03
%
Total
 
$
23,712

1.79
%
 
$
22,817

1.71
%


Other real estate owned (OREO) totaled $5.4 million at March 31, 2013, a decrease of $3.3 million compared to $8.7 million at December 31, 2012. As we announced last quarter, we completed a public auction of approximately 59 OREO properties during the first quarter of 2013. We did not experience further loss on those properties as a result of the auction. Total nonperforming assets at March 31, 2013 were $29.2 million, or 1.58% of total assets, a decrease of $2.4 million from December 31, 2012.

During the first quarter of 2013, the provision for loan losses was $237,000, a decrease of $31.3 million from the fourth quarter of 2012. This significant decrease is due to the significantly improved credit profile of the Company following the completion of the accelerated asset disposition plan. Total net charge-offs for the first quarter of 2013 were $1.0 million, or 0.27% of average loans on an annualized basis.

At March 31, 2013, the allowance for loan losses was $24.5 million, compared to $25.1 million at December 31, 2012. As a percentage of total loans held-for-investment, the allowance for loan losses was 1.88% in the first quarter of 2013, down from 1.92% in the fourth quarter of 2012. While credit quality has improved, the reserve remains at a conservative level due to continued economic uncertainty and other external factors in our markets. Out of the $24.5 million in total allowance for loan losses at March 31, 2013, the specific allowance for impaired loans accounted for $2.1 million, up from $1.4 million in the fourth quarter. The remaining general allowance of $22.4 million attributed to unimpaired loans was down slightly from $23.7 million at the end of the fourth quarter given improvement in several credit metrics.


Net Interest Income and Net Interest Margin

Net interest income was up quarter over quarter, totaling $15.1 million for the first quarter of 2013. We also experienced a significant increase in our net interest margin. The quarterly average margin increased 29 basis points to 3.57%, up from 3.28% at December 31, 2012. This increase in margin is due primarily to the continued repricing of our time deposits, the reduction in non-earning assets, the reinvestment of cash from the accelerated asset disposition, and the shift in deposit mix.






In the first quarter of 2013, we continued to strategically shift our deposit mix and lower our cost of deposits. Core deposits now represent 58.5% of total deposits, our highest percentage over the past five years, as we focus on core deposit growth. As a result of this strategy, our cost of deposits decreased to 0.71% for the first quarter of 2013 as compared to 0.84% in the fourth quarter of 2012.

Non-Interest Income

Non-interest income increased $4.7 million to $5.7 million in the first quarter of 2013 compared to $986,000 in the fourth quarter of 2012. The previous quarter included several losses related to the asset disposition plan and the sale of our reinsurance line of business, which impacted our non-interest income last quarter. Our mortgage division delivered $2.0 million in mortgage banking income during the first quarter of 2013 before recording negative provisions for reserves on mortgage loans sold of $1.3 million. Negative provisions resulted during the quarter due to the previously announced dissolution of our mortgage subsidiary.

Non-Interest Expense

Non-interest expense decreased in the first quarter of 2013 to $13.2 million as compared to $22.7 million in the fourth quarter of 2012. Last quarter, our non-interest expense was impacted by the asset disposition plan. With that plan behind us and continued reduction in OREO, our non-interest expense decreased as a result. The salary and benefits line item increased approximately $400,000 compared to the prior quarter. While our core salary expense remained flat, we began accruing for performance-based incentives in the first quarter. Also, like many other companies, we experienced higher payroll taxes beginning January 1, 2013.

Balance Sheet and Capital

Total assets decreased $76.8 million during the first quarter of 2013, and gross loans held-for-investment decreased only slightly compared to the fourth quarter as we begin to modestly grow our loan portfolio. Total deposits decreased $70.0 million, which primarily consists of higher-cost time deposits, as our core deposits increased $15.6 million compared to the prior quarter.

The Company's capital ratios have strengthened and continue to exceed all regulatory requirements. As of March 31, 2013, the Bank's leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 9.7%, 12.2%, and 13.5%, respectively. Leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 10.0%, 12.6%, and 13.8% respectively, for the holding company as of March 31, 2013. In addition, the Company's tangible common equity to total tangible assets ratio was 7.83% at the end of the first quarter, compared to 7.30% at December 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.
























Conference Call

Yadkin Valley Financial Corporation will host a conference call at 10:00 a.m. EST on Thursday, April 25, 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=128673&CompanyID=YAVY&e=1&mediaKey=C0BD0B7D7BA30A3E46A5C745FA0F7F34. A replay of the call will be available until May 1, 2013 by dialing 855-859-2056 or 404-537-3406 and entering Conference ID 46253205.


####

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, business environment, and potential implementation of the reverse stock split. 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 1-2 of Yadkin Valley Financial Corporation's annual report filed on Form 10-K with the SEC for the year ended December 31, 2012 and in the section entitled “Risk Factors” in the annual report filed on Form 10-K for the year ended December 31, 2012. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements.






For additional information contact:

Joseph H. Towell
President and Chief Executive Officer
(704) 768-1133
joe.towell@yadkinvalleybank.com

Jan H. Hollar
Executive Vice President and Chief Financial Officer
(704) 768-1161
jan.hollar@yadkinvalleybank.com







 Yadkin Valley Financial Corporation
 
 
 
 
 
 
 
 
 
 Consolidated Balance Sheets (Unaudited)
 
 
 
 
 
 
 
 
 
 
 (Amounts in thousands except share and per share data)
 
March 31, 2013
 
December 31, 2012 (a)
 
September 30, 2012
 
June 30, 2012
 
March 31, 2012
 Assets:
 
 
 
 
 
 
 
 
 
 Cash and due from banks
$
22,210

 
$
36,125

 
$
26,048

 
$
25,642

 
$
36,478

 Federal funds sold
50

 
50

 
50

 
50

 
50

 Interest-earning deposits with banks
20,447

 
102,221

 
97,124

 
75,895

 
67,443

 
 
 
 
 
 
 
 
 
 
 U.S. government agencies
17,232

 
27,527

 
32,869

 
23,058

 
23,433

 Mortgage-backed securities
248,030

 
230,894

 
221,806

 
248,674

 
263,230

 State and municipal securities
115,435

 
84,567

 
54,769

 
66,607

 
72,751

 Common and preferred stocks
149

 
132

 
1,112

 
1,133

 
1,111

Total investment securities
380,846

 
343,120

 
310,556

 
339,472

 
360,525

 
 
 
 
 
 
 
 
 
 
 Construction loans
133,200

 
131,981

 
147,408

 
189,840

 
196,991

 Commercial, financial and other loans
182,268

 
193,810

 
190,294

 
189,245

 
187,037

 Residential mortgages
166,565

 
140,931

 
174,728

 
167,774

 
166,563

 Commercial real estate loans
596,790

 
617,468

 
615,733

 
594,798

 
605,539

 Installment loans
32,037

 
33,426

 
34,216

 
34,177

 
34,926

 Revolving 1-4 family loans
193,404

 
191,888

 
196,489

 
196,547

 
196,818

Total loans
1,304,264

 
1,309,504

 
1,358,868

 
1,372,381

 
1,387,874

 Allowance for loan losses
(24,492
)
 
(25,149
)
 
(27,231
)
 
(28,797
)
 
(30,062
)
Net loans
1,279,772

 
1,284,355

 
1,331,637

 
1,343,584

 
1,357,812

 Loans held for sale
18,461

 
27,679

 
24,766

 
24,867

 
20,548

 Accrued interest receivable
6,502

 
6,376

 
6,229

 
6,512

 
6,932

 Bank premises and equipment
42,454

 
41,849

 
41,460

 
41,547

 
41,861

 Foreclosed real estate
5,449

 
8,738

 
22,294

 
25,573

 
28,751

 Non-marketable equity securities at cost
3,474

 
4,154

 
4,155

 
4,630

 
6,130

 Investment in bank-owned life insurance
26,587

 
26,433

 
26,274

 
26,114

 
26,091

 Core deposit intangible
2,475

 
2,653

 
2,914

 
3,180

 
3,455

 Other assets
37,865

 
39,685

 
26,871

 
28,273

 
20,530

Total assets
$
1,846,592

 
$
1,923,438

 
$
1,920,378

 
$
1,945,339

 
$
1,976,606

 
 
 
 
 
 
 
 
 
 
 Liabilities and shareholders' equity:
 
 
 
 
 
 
 
 
 
 Deposits:
 
 
 
 
 
 
 
 
 
 Non-interest bearing
$
257,388

 
$
273,896

 
$
256,402

 
$
244,191

 
$
235,417

 NOW, savings and money market accounts
656,524

 
624,460

 
606,220

 
613,051

 
626,538

 Time certificates:
 
 
 
 
 
 
 
 
 
 $100 or more
281,652

 
316,146

 
342,356

 
348,072

 
356,793

 Other
366,095

 
417,160

 
446,482

 
468,049

 
492,072

Total deposits
1,561,659

 
1,631,662

 
1,651,460

 
1,673,363

 
1,710,820

 
 
 
 
 
 
 
 
 
 
 Borrowings
99,160

 
105,136

 
102,299

 
99,310

 
105,723

 Accrued expenses and other liabilities
10,922

 
15,846

 
11,383

 
18,087

 
16,571

Total liabilities
1,671,741

 
1,752,644

 
1,765,142

 
1,790,760

 
1,833,114

 
 
 
 
 
 
 
 
 
 
 Total shareholders' equity
174,851

 
170,794

 
155,236

 
154,579

 
143,492

 Total liabilities and shareholders' equity
$
1,846,592

 
$
1,923,438

 
$
1,920,378

 
$
1,945,339

 
$
1,976,606

 
 
 
 
 
 
 
 
 
 
 Period end shares outstanding
43,151,652

 
43,151,646

 
20,003,688

 
20,003,688

 
19,506,188


(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)
 
March 31, 2013
 
December 31, 2012 (a)
 
September 30, 2012
 
June 30, 2012
 
March 31, 2012
 
 
 
 
 
 
 
 
 
 
 Interest and fees on loans (b)
$
16,679

 
$
17,338

 
$
17,735

 
$
17,944

 
$
18,939

 Interest on securities
1,548

 
1,381

 
1,674

 
1,754

 
2,006

 Interest on federal funds sold
6

 
8

 
9

 
8

 
7

 Interest-bearing deposits
42

 
66

 
28

 
38

 
37

   Total interest income
18,275

 
18,793

 
19,446

 
19,744

 
20,989

 Time deposits of $100 or more
1,352

 
1,346

 
1,762

 
1,913

 
1,992

 Other deposits
1,432

 
2,132

 
2,018

 
2,193

 
2,370

 Borrowed funds
439

 
570

 
477

 
480

 
735

   Total interest expense
3,223

 
4,048

 
4,257

 
4,586

 
5,097

Net interest income
15,052

 
14,745

 
15,189

 
15,158

 
15,892

 Provision for loan losses
237

 
31,554

 
4,251

 
2,218

 
2,351

        Net interest income after provision for loan losses
14,815

 
(16,809
)
 
10,938

 
12,940

 
13,541

Non-interest income
 
 
 
 
 
 
 
 
 
 Service charges on deposit accounts
1,269

 
1,398

 
1,319

 
1,325

 
1,243

 Other service fees (b)
927

 
986

 
857

 
893

 
895

 Income on investment in bank owned life insurance
153

 
159

 
159

 
157

 
157

 Mortgage banking activities (b)
3,288

 
1,448

 
1,599

 
1,674

 
1,139

 Gains on sale of securities
4

 
96

 
1,348

 
300

 

 Other than temporary impairment of investments
(39
)
 
(50
)
 

 

 

 Loss on sale of subsidiary
(1
)
 
(1,019
)
 

 

 

 Loss on sale of loans

 
(2,132
)
 
(900
)
 

 

 Other
56

 
100

 
283

 
57

 
75

   Total non-interest income
5,657

 
986

 
4,665

 
4,406

 
3,509

Non-interest expense
 
 
 
 
 
 
 
 
 
 Salaries and employee benefits (b)
7,389

 
6,935

 
6,914

 
6,354

 
6,110

 Occupancy and equipment
1,815

 
1,562

 
1,794

 
1,790

 
1,851

 Printing and supplies
163

 
157

 
168

 
151

 
145

 Data processing
395

 
447

 
456

 
453

 
387

 Communication expense
332

 
354

 
314

 
354

 
351

 Advertising and marketing
256

 
77

 
103

 
100

 
76

 Amortization of core deposit intangible
178

 
260

 
266

 
275

 
279

 FDIC assessment expense
592

 
664

 
650

 
659

 
695

 Attorney fees
90

 
263

 
311

 
150

 
216

 Other professional fees
476

 
736

 
491

 
479

 
306

 Loan collection expense (b)
217

 
569

 
69

 
192

 
249

 (Gain) loss on fixed assets

 
153

 

 
(1
)
 
(21
)
 Net cost of operation of other real estate owned
(822
)
 
8,136

 
1,322

 
2,745

 
1,228

 Other (b)
2,134

 
2,395

 
1,934

 
2,031

 
1,707

   Total non-interest income
13,215

 
22,708

 
14,792

 
15,732

 
13,579

        Income (loss) before income taxes
7,257

 
(38,531
)
 
811

 
1,614

 
3,471

 Provision for income taxes (benefit)
2,608

 
(14,632
)
 
54

 
(9,383
)
 

        Net income (loss)
4,649

 
(23,899
)
 
757

 
10,997

 
3,471

 Preferred stock dividend and amortization of preferred stock discount
445

 
1,419

 
838

 
833

 
821

        Net income (loss) available to common shareholders
$
4,204

 
$
(25,318
)
 
$
(81
)
 
$
10,164

 
$
2,650

 
 
 
 
 
 
 
 
 
 





     Basic
$
0.10

 
$
(1.21
)
 
$

 
$
0.52

 
$
0.14

     Diluted
$
0.10

 
$
(1.21
)
 
$

 
$
0.52

 
$
0.14

 
 
 
 
 
 
 
 
 
 
 Weighted average number of shares outstanding
 
 
 
 
 
 
 
 
 
     Basic
42,595,147

 
20,917,579

 
19,389,251

 
19,386,519

 
19,378,198

     Diluted
42,601,273

 
20,917,579

 
19,390,253

 
19,386,519

 
19,378,198

 
 
 
 
 
 
 
 
 
 
(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.







 Yadkin Valley Financial Corporation
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
At or For the Three Months Ended
 
March 31, 2013
 
December 31, 2012
 
September 30, 2012
 
June 30, 2012
 
March 31, 2012
 
 
 
 
 
 
 
 
 
 
Per Share Data:
 
 
 
 
 
 
 
 
 
Basic Earnings (Loss) per Share
$
0.10

 
$
(1.21
)
 
$

 
$
0.52

 
$
0.14

Diluted Earnings (Loss) per Share
0.10

 
(1.21
)
 

 
0.52

 
0.14

Book Value per Share
3.40

 
3.31

 
5.36

 
5.34

 
4.92

 
 
 
 
 
 
 
 
 
 
Selected Performance Ratios:
 
 
 
 
 
 
 
 
 
Return on Average Assets (annualized)
0.91
%
 
(5.15
)%
 
(0.02
)%
 
2.08
%
 
0.54
%
Return on Average Equity (annualized)
9.94
%
 
(53.53
)%
 
(0.21
)%
 
26.93
%
 
6.48
%
Net Interest Margin (annualized)(7)
3.57
%
 
3.28
 %
 
3.37
 %
 
3.39
%
 
3.55
%
Net Interest Spread (annualized)(7)
3.40
%
 
3.08
 %
 
3.19
 %
 
3.21
%
 
3.36
%
Non-interest Income as a % of Revenue(6)(7)
27.63
%
 
(6.23
)%
 
29.90
 %
 
25.40
%
 
20.58
%
Non-interest Income as a % of Average Assets (7)
0.30
%
 
0.05
 %
 
0.24
 %
 
0.23
%
 
0.18
%
Non-interest Expense as a % of Average Assets (7)
0.70
%
 
1.17
 %
 
0.76
 %
 
0.80
%
 
0.69
%
 
 
 
 
 
 
 
 
 
 
Asset Quality:
 
 
 
 
 
 
 
 
 
Loans 30-89 days past due (000's) (4)
$
6,060

 
$
14,000

 
$
13,354

 
$
10,321

 
$
10,245

Loans over 90 days past due still accruing (000's)

 

 

 

 

Nonperforming Loans (000's)
23,712

 
22,817

 
57,053

 
63,305

 
66,088

Other Real Estate Owned (000's)
5,449

 
8,738

 
22,294

 
25,573

 
28,751

Nonperforming Assets (000's)
29,161

 
31,555

 
79,347

 
88,878

 
94,839

Troubled debt restructurings (000's) (5)
8,579

 
17,667

 
13,929

 
12,596

 
15,259

Nonperforming Loans to Total Loans
1.79
%
 
1.71
 %
 
4.12
 %
 
4.53
%
 
4.69
%
Nonperforming Assets to Total Assets
1.58
%
 
1.64
 %
 
4.13
 %
 
4.57
%
 
4.80
%
Allowance for Loan Losses to Total Loans
1.85
%
 
1.88
 %
 
1.97
 %
 
2.06
%
 
2.13
%
Allowance for Loan Losses to Total Loans Held for Investment
1.88
%
 
1.92
 %
 
2.00
 %
 
2.10
%
 
2.17
%
Allowance for Loan Losses to Nonperforming Loans
103.29
%
 
110.22
 %
 
47.73
 %
 
45.49
%
 
45.49
%
Net Charge-offs/Recoveries to Average Loans (annualized)
0.27
%
 
9.74
 %
 
1.66
 %
 
0.99
%
 
1.44
%
 
 
 
 
 
 
 
 
 
 
Capital Ratios:
 
 
 
 
 
 
 
 
 
Equity to Total Assets
9.47
%
 
8.88
 %
 
8.08
 %
 
7.95
%
 
7.26
%
Tier 1 leverage ratio(1)
9.72
%
 
8.92
 %
 
8.73
 %
 
8.55
%
 
8.30
%
Tier 1 risk-based ratio(1)
12.23
%
 
11.73
 %
 
11.18
 %
 
10.89
%
 
10.61
%
Total risk-based capital ratio(1)
13.49
%
 
12.99
 %
 
12.44
 %
 
12.15
%
 
11.87
%
 
 
 
 
 
 
 
 
 
 
Non-GAAP disclosures(2):
 
 
 
 
 
 
 
 
 
Tangible Book Value per Share
$
3.34

 
$
3.25

 
$
5.21

 
$
5.18

 
$
4.74

Return on Tangible Equity (annualized) (3)
10.09
%
 
(54.34
)%
 
(0.21
)%
 
27.54
%
 
6.63
%
Tangible Common Equity to Tangible Assets (3)
7.83
%
 
7.30
 %
 
5.44
 %
 
5.33
%
 
4.69
%
Efficiency Ratio (7)
66.40
%
 
88.62
 %
 
66.46
 %
 
65.63
%
 
63.51
%
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 Common Equity is the difference of shareholders' equity less preferred shares, 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)
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 March 31,
 
 
2013
 
2012
 
 
(Dollars in Thousands)
 
 
Average
 
 
 
Yield/
 
Average
 
 
 
Yield/
 
 
Balance
 
Interest
 
Rate
 
Balance
 
Interest
 
Rate
 
INTEREST EARNING ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Total loans (1,2)
$
1,321,253

 
$
16,708

 
5.13
%
(8)
$
1,433,311

 
$
18,976

 
5.32
%
(8)
Investment securities
364,453

 
1,838

 
2.05
%
 
349,550

 
2,261

 
2.60
%
 
Interest-bearing deposits & federal funds sold
62,707

 
48

 
0.31
%
 
50,358

 
44

 
0.35
%
 
Total average earning assets (1)
1,748,413

 
18,594

 
4.31
%
(6)
1,833,219

 
21,281

 
4.67
%
(6)
Non-interest earning assets
128,610

 
 
 
 
 
135,972

 
 
 
 
 
Total average assets
$
1,877,023

 
 
 
 
 
$
1,969,191

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST BEARING LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
$
693,150

 
2,510

 
1.47
%
 
$
843,764

 
3,858

 
1.84
%
 
Other deposits
638,378

 
274

 
0.17
%
 
616,823

 
505

 
0.33
%
 
Borrowed funds
101,762

 
439

 
1.75
%
 
104,187

 
735

 
2.84
%
 
Total interest bearing liabilities
1,433,290

 
3,223

 
0.91
%
(7)
1,564,774

 
5,098

 
1.31
%
(7)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest bearing deposits
259,883

 
 
 
 
 
224,427

 
 
 
 
 
Other liabilities
12,307

 
 
 
 
 
16,100

 
 
 
 
 
Total average liabilities
1,705,480

 
 
 
 
 
1,805,301

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity
171,543

 
 
 
 
 
163,890

 
 
 
 
 
Total average liabilities and
 
 
 
 
 
 
 
 
 
 
 
 
   shareholders' equity
$
1,877,023

 
 
 
 
 
$
1,969,191

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INTEREST INCOME/
 
 
 
 
 
 
 
 
 
 
 
 
    YIELD (3,4)
 
 
$
15,371

 
3.57
%
(8)
 
 
$
16,183

 
3.55
%
(8)
INTEREST SPREAD (5)
 
 
 
 
3.40
%
(8)
 
 
 
 
3.36
%
(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 2013 and 2012 includes $45,000 and $41,000, respectively, of accretion for purchase accounting adjustments related to loans acquired in the merger with American Community.
(7)
Interest expense for 2013 and 2012 includes $9,000 and $(135,000), respectively, of accretion for purchase accounting adjustments relate 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.