EX-99.1 2 yavyq32013pressrelease.htm EX-99.1 YAVY Q3 2013 Press Release





Yadkin Financial Corporation Announces Third Quarter 2013 Results; Strong EPS Continues in Back Half of the Year


Third Quarter Highlights:

Net income available to common shareholders for the third quarter of 2013 was $4.3 million, or $0.30 per diluted share.
The average net interest margin for the quarter was 3.93%, an increase of 3 basis points compared to the prior quarter.
Total loan balances increased $18.7 million compared to the prior quarter, our second consecutive quarter of loan growth.
Nonperforming assets decreased for the fourth consecutive quarter, ending the quarter at 1.15% of total assets.
The Company continues to demonstrate a strong capital position, as evidenced by our Tier 1 leverage, Tier 1 risk-based, and total risk-based capital levels at the Bank. These ratios were 10.9%, 12.9%, and 14.2%, respectively, at September 30, 2013.

Elkin, NC - October 24, 2013 - Yadkin Financial Corporation (NASDAQ: YDKN), the holding company for Yadkin Bank, announced today financial results for the third quarter ended September 30, 2013. Net income available to common shareholders for the quarter was $4.3 million, or $0.30 per diluted share, compared to net income of $4.2 million, or $0.30 per diluted share, in the second quarter of 2013, and net loss of $81,000, or $0.01 per diluted share, in the third quarter of 2012.

Joe Towell, President and CEO of Yadkin Financial, commented, “We continue to demonstrate that 2013 is about solid profitability at Yadkin. I'm proud of our team for driving results as we work in a very competitive banking environment in the Carolinas. We continued our trends in growing loans, reducing nonperforming assets, and increasing our net interest margin. We are pleased to maintain attractive credit metrics while growing our loan portfolio, primarily in our desired categories of commercial and industrial, owner occupied real estate, and consumer.

Clearly, we have shown that our Board, management team, and employees are laser-focused on our success. We are looking forward to finishing the year strong and moving into 2014 with momentum and opportunity ahead of us. Our core bank continues to show its strengths in terms of quality loan growth and core deposit acquisition. Our mortgage and wealth management divisions continue to drive our non-interest income with their strong performances during 2013, and our focus on enhancing the customer experience has allowed us to better serve our existing customers and attract new customers.

While our industry and our economy continue to improve, we are pleased with our results through three quarters of 2013."










Third Quarter 2013 Financial Highlights

Asset Quality

The Bank's key asset quality metrics continue to be strong as we maintain a clean credit profile. First, our adversely classified items to Tier 1 capital and loan loss reserve ratio has continued to decrease, down to 22.02% at the end of the third quarter. Our nonperforming loans decreased $1.8 million compared to the prior quarter, to $17.9 million at September 30, 2013. In addition, the nonperforming loans to total loans ratio decreased to 1.33% at September 30, 2013, compared to 1.47% at June 30, 2013.




 
 
Nonperforming Loan Analysis
 
 
(Dollars in thousands)
 
 
September 30, 2013
 
June 30, 2013
Loan Type
 
Outstanding Balance
% of Total Loans
 
Outstanding Balance
% of Total Loans
Construction/land development
 
$
2,917

0.22
%
 
$
3,545

0.27
%
Residential construction
 
548

0.04
%
 
553

0.04
%
HELOC
 
1,373

0.10
%
 
2,003

0.15
%
1-4 family residential
 
3,312

0.25
%
 
2,749

0.21
%
Commercial real estate
 
7,831

0.58
%
 
7,739

0.58
%
Commercial & industrial
 
1,622

0.12
%
 
2,743

0.21
%
Consumer & other
 
271

0.02
%
 
366

0.03
%
Total
 
$
17,874

1.33
%
 
$
19,698

1.47
%

Other real estate owned (OREO) totaled $3.0 million at September 30, 2013, a decrease of $823,000 compared to $3.8 million at June 30, 2013. Total nonperforming assets at September 30, 2013 were $20.9 million, or 1.15% of total assets, a decrease of $2.6 million from June 30, 2013.

During the third quarter of 2013, the provision for loan losses was $40,000, a decrease of $15,000 from the second quarter of 2013. This decrease is due to the continued clean credit profile of the Company and the reduction in loans moving to nonperforming and classified status. Total net charge-offs for the third quarter of 2013 were $2.0 million, or 0.58% of average loans on an annualized basis.

At September 30, 2013, the allowance for loan losses was $21.0 million, compared to $22.9 million at June 30, 2013. As a percentage of total loans held-for-investment, the allowance for loan losses was 1.58% in the third quarter of 2013, down from 1.74% in the second quarter of 2013. While credit quality has improved, the reserve remains at a robust level due to continued economic uncertainty and other external factors in our markets. Out of the $21.0 million in total allowance for loan losses at September 30, 2013, the specific allowance for impaired loans accounted for $400,000, down from $2.0 million in the second quarter. The remaining general allowance of $20.6 million attributed to unimpaired loans was down from $20.9 million at the end of the second quarter.


Net Interest Income and Net Interest Margin

Net interest income was essentially flat at $16.1 million compared to the prior quarter. Our net interest margin continued to expand with the quarterly average margin increasing 3 basis points to 3.93%, up from 3.90% at June 30, 2013. This increase in margin is due to our continued loan growth, consistent yield on loans, lower cost of deposits, and slower prepayment speeds in our securities portfolio.






In the third quarter of 2013, we continued to strategically shift our deposit mix and lower our cost of deposits. Core deposits now represent 63.3% 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 0.51% for the quarter as compared to 0.55% in the second quarter of 2013.

Non-Interest Income

Non-interest income decreased $803,000 to $5.4 million in the third quarter compared to $6.2 million in the second quarter of 2013. This decrease is due primarily to a slowdown in the velocity of rate increases during the quarter, which impacts our mortgage income. This was offset by $310,000 in gains as a result of the branch sale executed during July 2013. While our mortgage portfolio is strong, income from this portfolio could moderate over the coming quarters due to anticipated trends in rate movement.

Non-Interest Expense

Non-interest expense decreased $693,000 during the third quarter, down to $14.2 million as compared to $14.8 million in the second quarter. The second quarter of 2013 included expenses related to our rebranding initiative, as well as additional fees incurred as a result of the Company's 1-for-3 reverse stock split, which caused the increase in expense during the prior quarter.

Balance Sheet and Capital

Total assets increased $11.6 million during the third quarter of 2013 as we begin to expand our loan portfolio due to our focus on quality loan growth. Total loans increased $18.7 million as compared to the prior quarter, marking our second consecutive quarter of loan growth. The decrease in total deposits of $31.8 million consisted primarily of a reduction in higher cost time deposits. Core deposits increased $4.4 million compared to the prior quarter, representing our fifth consecutive quarter of core deposit increase.

The Company's capital ratios have strengthened and continue to exceed all regulatory requirements. As of September 30, 2013, the Bank’s leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 10.9%, 12.9%, and 14.2%, respectively. Leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 11.1%, 13.2%, and 14.4% respectively, for the holding company as of September 30, 2013. In addition, the Company's tangible common equity to total tangible assets ratio was 8.2% at the end of the third quarter, compared to 8.0% at June 30, 2013. For capital adequacy purposes, leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio must be in excess of 5.0%, 6.0%, and 10.0%, respectively, to be considered well-capitalized.

Conference Call

Yadkin Financial Corporation will host a conference call at 10:00 a.m. EST on Thursday, October 24, 2013 to discuss financial results, business highlights, and outlook. The call may be accessed by dialing 877-312-5527 at least 10 minutes prior to the call. A webcast of the call audio may be accessed at http://www.media-server.com/m/p/9y7f997f. A replay of the call will be available until October 30, 2013
by dialing 855-859-2056 or 404-537-3406 and entering Conference ID 87522497.











####






About Yadkin Financial Corporation
Yadkin Financial Corporation is the holding company for Yadkin Bank, a full-service community bank with 33 branches throughout its two regions in North Carolina and South Carolina. The Western Region serves Avery, Watauga, Ashe, Surry, Wilkes, Yadkin, Durham, and Orange Counties. The Southern Region serves Iredell, 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 Mortgage, headquartered in Greensboro, NC. Securities brokerage services are provided by Yadkin Wealth, Inc., a Bank subsidiary with offices located throughout the branch network. Yadkin Financial Corporation’s website is www.yadkinbank.com. Yadkin shares are traded on NASDAQ under the symbol YDKN.



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 44-45 of Yadkin Financial Corporation’s quarterly report filed on Form 10-Q with the SEC for the quarter ended September 30, 2013 and in the sections entitled “Forward Looking Statements” in quarterly reports filed on Form 10-Q for the quarters ended June 30, 2013, March 31, 2013, and September 30, 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@yadkinbank.com

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








 Yadkin Financial Corporation
 
 
 
 
 
 
 
 
 
 Consolidated Balance Sheets (Unaudited)
 
 
 
 
 
 
 
 
 
 
 (Amounts in thousands except share and per share data)
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012 (a)
 
September 30, 2012
 Assets:
 
 
 
 
 
 
 
 
 
 Cash and due from banks
$
32,417

 
$
28,104

 
$
22,210

 
$
36,125

 
$
26,048

 Federal funds sold
15

 
50

 
50

 
50

 
50

 Interest-earning deposits with banks
6,695

 
4,654

 
20,447

 
102,221

 
97,124

 
 
 
 
 
 
 
 
 
 
 U.S. government agencies
16,536

 
16,625

 
17,232

 
27,527

 
32,869

 Mortgage-backed securities
199,492

 
203,173

 
248,030

 
230,894

 
221,806

 State and municipal securities
109,626

 
110,410

 
115,435

 
84,567

 
54,769

 Common and preferred stocks
3,036

 
137

 
149

 
132

 
1,112

Total investment securities
328,690

 
330,345

 
380,846

 
343,120

 
310,556

 
 
 
 
 
 
 
 
 
 
 Construction loans
128,951

 
127,564

 
133,200

 
131,981

 
147,408

 Commercial, financial and other loans
191,874

 
186,965

 
182,268

 
193,810

 
190,294

 Residential mortgages
171,747

 
167,784

 
166,565

 
140,931

 
174,728

 Commercial real estate loans
616,116

 
604,667

 
596,790

 
617,468

 
615,733

 Installment loans
31,450

 
32,133

 
32,037

 
33,426

 
34,216

 Revolving 1-4 family loans
193,299

 
195,648

 
193,404

 
191,888

 
196,489

Total loans
1,333,437

 
1,314,761

 
1,304,264

 
1,309,504

 
1,358,868

 Allowance for loan losses
(21,014
)
 
(22,924
)
 
(24,492
)
 
(25,149
)
 
(27,231
)
Net loans
1,312,423

 
1,291,837

 
1,279,772

 
1,284,355

 
1,331,637

 Loans held for sale
12,632

 
22,545

 
18,461

 
27,679

 
24,766

 Accrued interest receivable
6,339

 
6,546

 
6,502

 
6,376

 
6,229

 Bank premises and equipment
41,050

 
42,410

 
42,454

 
41,849

 
41,460

 Foreclosed real estate
2,989

 
3,812

 
5,449

 
8,738

 
22,294

 Non-marketable equity securities at cost
5,273

 
3,473

 
3,474

 
4,154

 
4,155

 Investment in bank-owned life insurance
26,888

 
26,736

 
26,587

 
26,433

 
26,274

 Core deposit intangible
2,133

 
2,301

 
2,475

 
2,653

 
2,914

 Other assets
35,973

 
39,102

 
37,865

 
39,685

 
26,871

Total assets
$
1,813,517

 
$
1,801,915

 
$
1,846,592

 
$
1,923,438

 
$
1,920,378

 
 
 
 
 
 
 
 
 
 
 Liabilities and shareholders' equity:
 
 
 
 
 
 
 
 
 
 Deposits:
 
 
 
 
 
 
 
 
 
   Non-interest bearing
$
266,951

 
$
252,618

 
$
257,388

 
$
273,896

 
$
256,402

   NOW, savings and money market accounts
676,502

 
686,438

 
656,524

 
624,460

 
606,220

   Time certificates:
 
 
 
 
 
 
 
 
 
   $100 or more
236,787

 
251,168

 
281,652

 
316,146

 
342,356

   Other
311,096

 
332,873

 
366,095

 
417,160

 
446,482

Total deposits
1,491,336

 
1,523,097

 
1,561,659

 
1,631,662

 
1,651,460

 
 
 
 
 
 
 
 
 
 
 Borrowings
131,080

 
91,896

 
99,160

 
105,136

 
102,299

 Accrued expenses and other liabilities
12,229

 
12,306

 
10,922

 
15,846

 
11,383

Total liabilities
1,634,645

 
1,627,299

 
1,671,741

 
1,752,644

 
1,765,142

 
 
 
 
 
 
 
 
 
 
 Total shareholders' equity
178,872

 
174,616

 
174,851

 
170,794

 
155,236

 Total liabilities and shareholders' equity
$
1,813,517

 
$
1,801,915

 
$
1,846,592

 
$
1,923,438

 
$
1,920,378

 
 
 
 
 
 
 
 
 
 
 Period end shares outstanding
14,383,986

 
14,383,986

 
14,383,884

 
14,383,882

 
6,667,896


(a) Derived from audited consolidated financial statements






 Yadkin Financial Corporation
 
 
 
 
 
 
 
 
 
 Consolidated Income Statements (Unaudited)
 
 
 
 
 
 
 
 
 
 
 Three Months Ended
 
 (Amounts in thousands except share and per share data)
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
 
September 30, 2012
 
 
 
 
 
 
 
 
 
 
 Interest and fees on loans
$
16,849

 
$
16,950

 
$
16,679

 
$
17,338

 
$
17,735

 Interest on securities
1,616

 
1,686

 
1,548

 
1,381

 
1,674

 Interest on federal funds sold

 
3

 
6

 
8

 
9

 Interest-bearing deposits
5

 
12

 
42

 
66

 
28

     Total interest income
18,470

 
18,651

 
18,275

 
18,793

 
19,446

 Time deposits of $100 or more
877

 
1,009

 
1,352

 
1,346

 
1,762

 Other deposits
1,034

 
1,112

 
1,432

 
2,132

 
2,018

 Borrowed funds
423

 
409

 
439

 
570

 
477

     Total interest expense
2,334

 
2,530

 
3,223

 
4,048

 
4,257

Net interest income
16,136

 
16,121

 
15,052

 
14,745

 
15,189

 Provision for loan losses
40

 
55

 
237

 
31,554

 
4,251

        Net interest income after provision for loan losses
16,096

 
16,066

 
14,815

 
(16,809
)
 
10,938

Non-interest income:
 
 
 
 
 
 
 
 
 
 Service charges on deposit accounts
1,336

 
1,317

 
1,269

 
1,398

 
1,319

 Other service fees
1,259

 
1,401

 
927

 
986

 
857

 Income on investment in bank owned life insurance
152

 
150

 
153

 
159

 
159

 Mortgage banking activities
1,713

 
2,546

 
3,288

 
1,448

 
1,599

 Gains on sale of securities
253

 
272

 
4

 
96

 
1,348

 Other than temporary impairment of investments

 

 
(39
)
 
(50
)
 

 Loss on sale of subsidiary

 

 
(1
)
 
(1,019
)
 

 Loss on sale of loans

 

 

 
(2,132
)
 
(900
)
 Gain on sale of branch
310

 

 

 

 

 Other
358

 
498

 
56

 
100

 
283

      Total non-interest income
5,381

 
6,184

 
5,657

 
986

 
4,665

Non-interest expense:
 
 
 
 
 
 
 
 
 
 Salaries and employee benefits
7,780

 
7,953

 
7,389

 
6,935

 
6,914

 Occupancy and equipment
2,001

 
1,951

 
1,815

 
1,562

 
1,794

 Printing and supplies
159

 
150

 
163

 
157

 
168

 Data processing
374

 
350

 
395

 
447

 
456

 Communication expense
350

 
338

 
332

 
354

 
314

 Advertising and marketing
348

 
433

 
256

 
77

 
103

 Amortization of core deposit intangible
166

 
175

 
178

 
260

 
266

 FDIC assessment expense
363

 
642

 
592

 
664

 
650

 Attorney fees
90

 
178

 
90

 
263

 
311

 Other professional fees
237

 
497

 
476

 
736

 
491

 Loan collection expense
203

 
201

 
217

 
569

 
69

 (Gain) loss on fixed assets
154

 

 

 
153

 

 Net cost of operation of other real estate owned
93

 
(174
)
 
(822
)
 
8,136

 
1,322

 Other
1,832

 
2,149

 
2,134

 
2,395

 
1,934

      Total non-interest expense
14,150

 
14,843

 
13,215

 
22,708

 
14,792

          Income (loss) before income taxes
7,327

 
7,407

 
7,257

 
(38,531
)
 
811

Provision for income taxes (benefit)
2,616

 
2,598

 
2,608

 
(14,632
)
 
54

         Net income (loss)
4,711

 
4,809

 
4,649

 
(23,899
)
 
757

Preferred stock dividend and amortization of preferred stock discount
421

 
590

 
445

 
1,419

 
838

        Net income (loss) available to common shareholders
$
4,290

 
$
4,219

 
$
4,204

 
$
(25,318
)
 
$
(81
)





 
 
 
 
 
 
 
 
 
 
Net income (loss) per common share (a)
 
 
 
 
 
 
 
 
 
     Basic
$
0.30

 
$
0.30

 
$
0.30

 
$
(3.63
)
 
$
(0.01
)
     Diluted
$
0.30

 
$
0.30

 
$
0.30

 
$
(3.63
)
 
$
(0.01
)
 
 
 
 
 
 
 
 
 
 
  Weighted average number of shares outstanding
 
 
 
 
 
 
 
 
 
     Basic
14,205,705

 
14,205,223

 
14,198,382

 
6,972,526

 
6,463,084

     Diluted
14,249,152

 
14,223,604

 
14,200,424

 
6,972,526

 
6,463,084

 
 
 
 
 
 
 
 
 
 
(a) Net income (loss) per share for prior periods has been adjusted to reflect the 1-for-3 reverse stock split.







 Yadkin Financial Corporation
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
At or For the Three Months Ended
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
 
September 30, 2012
 
 
 
 
 
 
 
 
 
 
Per Share Data:
 
 
 
 
 
 
 
 
 
Basic Earnings (Loss) per Share (8)
$
0.30

 
$
0.30

 
$
0.30

 
$
(3.63
)
 
$
(0.01
)
Diluted Earnings (Loss) per Share (8)
0.30

 
0.30

 
0.30

 
(3.63
)
 
(0.01
)
Book Value per Share (8)
10.47

 
10.17

 
10.21

 
9.93

 
16.08

 
 
 
 
 
 
 
 
 
 
Selected Performance Ratios:
 
 
 
 
 
 
 
 
 
Return on Average Assets (annualized)
0.95
%
 
0.93
%
 
0.91
%
 
(5.15
)%
 
(0.02
)%
Return on Average Equity (annualized)
9.74
%
 
9.63
%
 
9.94
%
 
(53.53
)%
 
(0.21
)%
Net Interest Margin (annualized)
3.93
%
 
3.90
%
 
3.57
%
 
3.28
 %
 
3.37
 %
Net Interest Spread (annualized)
3.80
%
 
3.76
%
 
3.40
%
 
3.08
 %
 
3.19
 %
Non-interest Income as a % of Revenue(6)
25.05
%
 
27.79
%
 
27.63
%
 
(6.23
)%
 
29.90
 %
Non-interest Income as a % of Average Assets
0.30
%
 
0.34
%
 
0.30
%
 
0.05
 %
 
0.24
 %
Non-interest Expense as a % of Average Assets
0.79
%
 
0.82
%
 
0.70
%
 
1.17
 %
 
0.76
 %
 
 
 
 
 
 
 
 
 
 
Asset Quality:
 
 
 
 
 
 
 
 
 
Loans 30-89 Days Past Due (000's) (4)
$
4,412

 
$
6,493

 
$
6,060

 
$
14,000

 
$
13,354

Loans Over 90 Days Past Due Still Accruing (000's)

 

 

 

 

Nonperforming Loans (000's)
17,874

 
19,698

 
23,712

 
22,817

 
57,053

Other Real Estate Owned (000's)
2,989

 
3,812

 
5,449

 
8,738

 
22,294

Nonperforming Assets (000's)
20,864

 
23,510

 
29,161

 
31,555

 
79,347

Accruing/Performing Troubled Debt Restructurings (000's) (5)
5,599

 
9,162

 
8,579

 
17,667

 
13,929

Nonperforming Loans to Total Loans
1.33
%
 
1.47
%
 
1.79
%
 
1.71
 %
 
4.12
 %
Nonperforming Assets to Total Assets
1.15
%
 
1.30
%
 
1.58
%
 
1.64
 %
 
4.13
 %
Allowance for Loan Losses to Total Loans
1.56
%
 
1.71
%
 
1.85
%
 
1.88
 %
 
1.97
 %
Allowance for Loan Losses to Total Loans Held for Investment
1.58
%
 
1.74
%
 
1.88
%
 
1.92
 %
 
2.00
 %
Allowance for Loan Losses to Nonperforming Loans
117.57
%
 
116.38
%
 
103.29
%
 
110.22
 %
 
47.73
 %
Net Charge-offs/Recoveries to Average Loans (annualized)
0.58
%
 
0.49
%
 
0.27
%
 
9.74
 %
 
1.66
 %
 
 
 
 
 
 
 
 
 
 
Capital Ratios:
 
 
 
 
 
 
 
 
 
Equity to Total Assets
9.86
%
 
9.69
%
 
9.47
%
 
8.88
 %
 
8.08
 %
Tier 1 Leverage Ratio(1)
10.88
%
 
10.30
%
 
9.72
%
 
8.92
 %
 
8.73
 %
Tier 1 Risk-based Ratio(1)
12.92
%
 
12.49
%
 
12.23
%
 
11.73
 %
 
11.18
 %
Total Risk-based Capital Ratio(1)
14.17
%
 
13.74
%
 
13.49
%
 
12.99
 %
 
12.44
 %
 
 
 
 
 
 
 
 
 
 
Non-GAAP Disclosures(2):
 
 
 
 
 
 
 
 
 
Tangible Book Value per Share
$
10.32

 
$
10.01

 
$
10.03

 
$
9.75

 
$
15.64

Return on Tangible Equity (annualized) (3)
9.87
%
 
9.76
%
 
10.09
%
 
(54.34
)%
 
(0.21
)%
Tangible Common Equity to Tangible Assets (3)
8.19
%
 
8.00
%
 
7.83
%
 
7.30
 %
 
5.44
 %
Efficiency Ratio (7)
63.47
%
 
66.55
%
 
66.40
%
 
88.62
 %
 
66.46
 %
Notes:
(1)
Tier 1 leverage, Tier 1 risk-based, and Total risk-based ratios are ratios for the bank, Yadkin Bank 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)
Efficiency ratio is calculated by taking non-interest expense less the amortization of intangibles and gains on sale of OREO, as a percentage of total taxable equivalent net interest income and non-interest income less gains on sale of securities, gains (losses) on sale of loans, gains on sale of branch and other than temporary impairment of investments.
(8)
Prior period per share amounts have been adjusted to reflect the 1-for-3 reverse stock split.











Yadkin Financial Corporation
 
 
 
 
 
 
 
Average Balance Sheets and Net Interest Income Analysis (Unaudited)
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
2013
 
2012
 
 
(Dollars in Thousands)
 
 
Average
 
 
 
Yield/
 
Average
 
 
 
Yield/
 
 
Balance
 
Interest
 
Rate
 
Balance
 
Interest
 
Rate
 
INTEREST EARNING ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Total loans (1,2)
$
1,334,620

 
$
16,878

 
5.02
%
 
$
1,393,717

 
$
17,770

 
5.07
%
 
Investment securities
326,990

 
1,969

 
2.39
%
 
355,133

 
1,901

 
2.13
%
 
Interest-bearing deposits & federal funds sold
6,655

 
5

 
0.29
%
 
74,243

 
37

 
0.20
%
 
Total average earning assets (1)
1,668,265

 
18,852

 
4.48
%
(6)
1,823,093

 
19,708

 
4.30
%
(6)
Non-interest earning assets
125,801

 
 
 
 
 
129,713

 
 
 
 
 
Total average assets
$
1,794,066

 
 
 
 
 
$
1,952,806

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST BEARING LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits
$
561,882

 
$
1,622

 
1.15
%
 
$
796,695

 
$
3,449

 
1.72
%
 
Other deposits
678,071

 
289

 
0.17
%
 
610,286

 
331

 
0.22
%
 
Borrowed funds
110,205

 
423

 
1.52
%
 
113,048

 
477

 
1.68
%
 
Total interest bearing liabilities
1,350,158

 
2,334

 
0.69
%
(7)
1,520,029

 
4,257

 
1.11
%
(7)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest bearing deposits
257,357

 
 
 
 
 
249,054

 
 
 
 
 
Other liabilities
11,840

 
 
 
 
 
28,542

 
 
 
 
 
Total average liabilities
1,619,355

 
 
 
 
 
1,797,625

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity
174,711

 
 
 
 
 
155,181

 
 
 
 
 
Total average liabilities and
 
 
 
 
 
 
 
 
 
 
 
 
   shareholders' equity
$
1,794,066

 
 
 
 
 
$
1,952,806

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INTEREST INCOME/
 
 
 
 
 
 
 
 
 
 
 
 
    YIELD (3,4)
 
 
$
16,518

 
3.93
%
 
 
 
$
15,451

 
3.37
%
 
INTEREST SPREAD (5)
 
 
 
 
3.80
%
 
 
 
 
 
3.19
%
 


(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 $64,000 and $55,000, 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 $67,000, respectively, of accretion for purchase accounting adjustments related to deposits and borrowings acquired in the merger with American Community.